A2Z Events the Following Data Are from the Company's Records

question 70

Multiple Choice

A2Z Events The following data are from the company's records for 2012:
$\begin{array}{ll} \text {Credit sales during the year } &\$ 2,400,000 \\ \text {Accounts Receivable-December 31, 2012} &410,000 \\ \text {Allowance for Doubtful Accounts-December 31, 2012 } &55,000\\ \text {Bad debt expense for the year } &70,000\end{array}$
-Refer to A2Z Events.What are the effects on the accounting equation when the company makes the adjustment to record bad debt expense using the allowance method?

• A)Assets increase and liabilities decrease
• B)Assets and stockholders' equity decrease
• C)Assets increase and stockholders' equity decreases
• D)Assets decrease and stockholders' equity increases