If the Amount of Uncollectible Accounts Expense Is Understated at Year

question 66

Multiple Choice

If the amount of uncollectible accounts expense is understated at year end,

• A)net Accounts Receivable will be understated.
• B)total liabilities will be overstated.
• C)net income will be understated.
• D)Allowance for Uncollectible Accounts will be understated.

---

Definitions:

Shares

Units of ownership interest in a corporation or financial asset that provide for an equal distribution in any profits, if any are declared, in the form of dividends.

Legal Entity

An organization that has legal rights and obligations, including the ability to enter into contracts and own property.

Stockholders' Equity

The residual interest in the assets of a corporation after subtracting liabilities, representing the ownership interest of shareholders.

Corporation

A business organized under state or federal statutes as a separate legal entity.