The year-end adjusting entry to recognize uncollectible accounts expense will
A)decrease assets and decrease equity.
B)increase assets and decrease equity.
C)increase liabilities and increase equity.
D)decrease liabilities and increase equity.

Question

Quizplus · Accepted Answer

Recognizing uncollectible accounts expense decreases assets (through an increase in the allowance for doubtful accounts) and decreases equity (through an increase in expenses, which reduces net income and retained earnings).

The Year-End Adjusting Entry to Recognize Uncollectible Accounts Expense Will