Using the following categories, indicate the effects of the following transactions. Use + for increase and — for decrease and indicate the accounts affected and the amounts.

a. At the end of the period, bad debt expense is estimated to be $10,000.

b. During the period, bad debts are written off in the amount of $8,000.

Indicate the most likely effect of the following changes in credit policy on the receivables turnover ratio (+ for increase, — for decrease, and NE for no effect).

a. Granted credit with shorter payment deadlines.

b. Increased effectiveness of collection methods.

c. Granted credit to less creditworthy customers.

Transcribed Image Text:

Assets Liabilities + Stockholders' Equity