The Entry to Recognize the Write-Off of an Uncollectible Account

question 81

Multiple Choice

The entry to recognize the write-off of an uncollectible account will

• A) increase total assets and total equity.
• B) increase total assets and decrease total equity.
• C) decrease total assets and total equity.
• D) not affect total assets or total equity.

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Definitions:

Total Revenue

The total income earned by a firm from selling its products or services, calculated as the quantity sold multiplied by the selling price.

Marginal Revenue

The additional income earned by selling one more unit of a product or service.

Minimum AVC

The lowest point on the Average Variable Cost curve, indicating the most efficient scale of production where variable costs per unit are minimized.

Economic Losses

Refers to the situation where total costs exceed total revenues, leading to a negative net income for a business.