54.Quill & Pens Stationery Pty Ltd decides to write off a debt of $450 from one customer. Quill & Pens Stationery Pty Ltd adopts the Allowance Method of writing off a bad debt.

(Disregard GST)

What would be the effect on the relevant accounts if the $450 write off was not recorded?

Group of answer choices

1.Overstate Accounts receivable by $450 and overstate Allowance for Doubtful Debts by $450

2.Understate Accounts receivable by $450 and overstate Allowance for Doubtful Debts by $450

3.Overstate Accounts receivable by $450 and understate Allowance for Doubtful Debts by $450

4.Understate Accounts receivable by $450 and overstate Bad Debts by $450