What would be the effect of the account receivable write-off

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Question 1: International, Inc. established an allowance for bad debts at the end of October. In November, International wrote off a $500 account receivable because payment was considered to be remote. What would be the effect of the $500 account receivable write-off on International's November financial statements?

Option 1: Assets would decrease, liabilities would remain constant and retained earning would decrease.

Option 2: Assets would remain constant; liabilities would increase and retained earnings would decrease.

Option 3: · No change would be made in total assets, liabilities or shareholder's equity.

Option 4: Assets would decrease, liabilities would decrease and retained earnings would remain constant.

Reference no: EM132586557

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