Buttercup Florist Uses the Allowance Method to Account for Uncollectible

question 34

Multiple Choice

Buttercup Florist uses the allowance method to account for uncollectible accounts. Unable to collect a $150 account from a customer, Buttercup determined it was uncollectible. Which of the following statements is correct regarding the effect of writing-off a receivable?

• A)The net realizable value of receivables and total assets increase.
• B)The net realizable value of receivables and total assets decrease.
• C)The net realizable value of receivables decreases, and total assets increase.
• D)The net realizable value of receivables and total assets remains unchanged.

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Definitions:

LLCs

Limited Liability Companies, a flexible form of business enterprise that offers limited liability protection to its owners.

Manager-managed LLCs

A structure for a Limited Liability Company where the daily business operations are controlled and managed by appointed managers rather than by all its members.

Members

Individuals or entities that are part of a group, organization, or body, often with certain rights and responsibilities.

Duties

Responsibilities or obligations of an individual, such as paying taxes or performing certain actions.