Question

If the amount of uncollectible account expense is overstated at year enda. net income will be overstated.b. stockholders' equity will be overstated.c. Allowance for Doubtful accounts will be understated.d. net Accounts Receivable will be understated.

Answer 1

Answer:

d. net Accounts Receivable will be understated.

Explanation:

Uncollectibel expense account is also known as Bad debt expense. When an account is written off using the Uncollectible account method, accounts receivable decreases and the Uncollectible account decreases. If Allowance for doubtful accounts is corrected then it results in decrease in accounts receivable. Since Uncollectible account expense is overstated it understates the accounts receivable balance.

Therefore, If the amount of uncollectible account expense is overstated at year end the cash realizable value of  Accounts receivable will be understated.