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?

Assets would decrease, liabilities would remain constant and retained earning would decrease.

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

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

Assets would decrease, liabilities would decrease and retained earnings would remain constant.