Accounting for IGCSE & O level - Final Statements (Section 11 - No. 29)
What is the impact of writing off an uncollectible account receivable on the accounting equation?
Assets increase and equity decreases.
Assets decrease and equity decreases.
Assets increase and liabilities increase.
Assets decrease and liabilities increase.
Uitleg
Writing off an uncollectible account receivable reduces the asset (accounts receivable) and indirectly reduces equity (through a reduction in net income).