If the amount of bad debts expense is understated at year end, then
A)profit will be understated.
B)shareholders' equity will be understated.
C)Allowance for Doubtful Accounts will be overstated.
D)net Accounts Receivable will be overstated.

Question

Quizplus · Accepted Answer

If bad debts expense is understated, the Allowance for Doubtful Accounts will be lower than it should be, leading to an overstatement of net Accounts Receivable.

If the Amount of Bad Debts Expense Is Understated at Year