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:

Interpersonal Behaviors

Actions and reactions in interactions between individuals, impacting relationships and communication effectiveness.

Common Purpose

Shared goals or objectives that unite individuals or groups in their efforts toward achievement and collaboration.

Courage

The ability to confront fear, pain, danger, uncertainty, or intimidation.

Followership Process

The dynamics and behaviors of individuals in a subordinate role, focusing on how they contribute to the effectiveness of leadership and organizational objectives.