Question

Consider the following transactions associated with accounts receivable and the allowance for uncollectible accounts.

Required: For each transaction, indicate whether it would increase, decrease, or have no effect (leave the cell blank) on the account totals. (Hint: Make sure the accounting equation, Assets = Liabilities + Stockholders’ Equity, remains in balance after each transaction.)

Options:
a) Increase
b) Decrease
c) No Effect

Answer 1

In this question, we determine the effect of each transaction on accounts receivable and the allowance for uncollectible accounts.

Step-by-step explanation:

In the given question, we have to determine the effect of each transaction on the accounts receivable and the allowance for uncollectible accounts.

1. a. increases, decreases, has no effect on
2. b. decreases has no effect, increases
3. c. increases, has no effect on, decreases
4. d. decreases, increases, has no effect on

The correct answer would be:

1. a. Increases accounts receivable, decreases allowance for uncollectible accounts
2. b. Decreases accounts receivable, has no effect on allowance for uncollectible accounts
3. c. Increases in accounts receivable have no effect on allowance for uncollectible accounts
4. d. Decreases accounts receivable, increases allowance for uncollectible accounts