Ace Computing Company on January 1, Year 1, the Accounts Receivable and the Receivable

question 29

Multiple Choice

Ace Computing Company
On January 1, Year 1, the accounts receivable and the allowance for doubtful accounts carried balances of $40,000 and $1,500 respectively. During the year, the company reported $80,000 of credit sales. There were receivables of $500 written off as uncollected in Year 1. Cash collections of receivables amounted to $78,200. The company estimates that it will be unable to collect 4% of the year-end accounts receivable balance.
-Refer to the figure Ace Computing Company.What will be the impact of the entry to recognize the write-off of the specific uncollected accounts?

• A) Total assets and shareholders' equity increase.
• B) Total assets increase and shareholders' equity decreases.
• C) Total assets decrease and shareholders' equity increases.
• D) There will be no impact on either total assets or shareholders' equity.

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Definitions:

Quality of Life

A broad concept that involves individuals' overall well-being, including physical health, psychological state, level of independence, social relationships, personal beliefs, and their relationship to salient features of their environment.

Equity Theory

A theory of motivation that suggests individuals assess their job satisfaction based on the ratio of their inputs to their outcomes in comparison to others.

Transformational Leadership Theory

A leadership approach that causes change in individuals and social systems, enhancing the motivation, morale, and performance of followers through a variety of mechanisms.

Job Satisfaction Theory

Job Satisfaction Theory explores the factors that lead to an individual's level of satisfaction with their job, including work environment, role, rewards, and personal expectations.