Which of the following answers correctly shows the effect of the December 31, 2012 adjusting entry for uncollectible accounts on the financial statements of the Lindley Corporation?
A)Option A
B)Option B
C)Option C
D)Option D

Question

Which of the following answers correctly shows the effect of the December 31, 2012 adjusting entry for uncollectible accounts on the financial statements of the Lindley Corporation? 
A)Option A 
B)Option B 
C)Option C 
D)Option D

Quizplus · Accepted Answer

$225,000 credit sales x 3% = $6,750 uncollectible accounts expense; The adjusting entry decreases assets (increases allowance for doubtful accounts) and increases expenses (uncollectible accounts expense), which decreases net income and equity. It does not affect the statement of cash flows.

Which of the Following Answers Correctly Shows the Effect of the December