Businesses using the allowance method for the recognition of uncollectible accounts expense commonly experience four accounting events:
1. Recognition of uncollectible accounts expense through a year-end adjustment.
2. Write-off of uncollectible accounts.
3. Recognition of revenue on account.
4. Collection of cash from accounts receivable.

Required
Show the effect of each event on the elements of the financial statements, using a horizontal statements model like the one shown next. Use the following coding scheme to record your answers: increase is +, decrease is −, not affected is NA. In the Statement of Cash Flows column, indicate whether the item is an operating activity (OA), investing activity (IA), or financing activity (FA). The first transaction is entered as an example.

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Balance Sheet Statement Income Statement Event No. of Cash Llab. Exp. Assets = + Stk. Equlty Net Inc. Flows Rev. NA 1. NA NA