Richard LLC accounts for possible bad debts using the allowance method.When an actual bad debt occurs,what effect does it have on the accounting equation?

Question

Quizplus · Accepted Answer

When an actual bad debt occurs, the allowance for doubtful accounts (a contra-asset account) is reduced, and accounts receivable (an asset) is reduced by the same amount, resulting in no net effect on the accounting equation.

Richard LLC Accounts for Possible Bad Debts Using the Allowance