Question

York County estimated 2 percent of its property taxes would by uncollectible. During the year, the County wrote off several accounts. Assuming the 2 percent estimate is still deemed to be appropriate at year-end, what effect will the recording of an allowance for estimated uncollectible taxes receivable and the subsequent write-offs have on the following?

Revenues Expenditures
a. Decrease Increase
b. Decrease No effect
c. No effect Increase
d. No effect No effect

Answer 1

Recording an allowance for estimated uncollectible taxes receivable and subsequent write-offs will have no effect on revenues and increase expenditures in York County.

Step-by-step explanation:

The recording of an allowance for estimated uncollectible taxes receivable and the subsequent write-offs will have No effect on Revenues and will Increase Expenditures in York County.

When the County records an allowance for estimated uncollectible taxes receivable, it is acknowledging that a portion of the property taxes may not be collected. This reduces the amount of expected revenue that the County will receive.

Additionally, when the County writes off accounts that are deemed uncollectible, it is recognizing that those taxes will not be collected and removing them from the accounts receivable balance. This reduces the County's assets, which are represented as expenditures.