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

Question

Quizplus · Accepted Answer

The adjusting entry will decrease assets by increasing the contra-asset allowance for doubtful accounts and will increase uncollectible accounts expense, which decreases equity.

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