The following data are from the company's records for 2013:

-Refer to the Ace Computing Company. The entry required to recognize the bad debts expense for 2013 will act to

Question

The following data are from the company's records for 2013:
 
-Refer to the Ace Computing Company. The entry required to recognize the bad debts expense for 2013 will act to

Quizplus · Accepted Answer

Recognizing bad debts expense for 2013 will decrease total assets (specifically accounts receivable) and decrease retained earnings. This is because bad debt expense is an expense account, which reduces net income and thus, retained earnings. The decrease in accounts receivable also reduces total assets.

The Following Data Are from the Company's Records for 2013