Final answer:
The false statement is that recording an accrued asset for interest increases stockholders' equity. While it increases assets on the balance sheet, it does not directly increase stockholders' equity unless that interest is actually realized as income.
Step-by-step explanation:
Identifying the False Statement
The false statement among the options presented is: Recording an accrued asset for interest increases stockholders' equity. The action of recording an accrued asset for interest is part of the accrual accounting process, where revenues and expenses are recorded when they are earned or incurred, not when the cash is exchanged. This recognition of accrued interest increases the assets on the balance sheet but does not directly increase the stockholders' equity. Stockholders' equity would only increase if the accrued interest is actually realized as income.
When a company writes off an uncollectible account, the net realizable value of accounts receivable does not change, as the allowance for doubtful accounts has already accounted for potential losses. The issuer of a note records a receivable on their books on the date the note is issued, which reflects the right to receive money in the future. Using the allowance method of accounting for accounts receivables does indeed follow the accounting matching concept, ensuring expenses are recorded in the same period as the revenues they help to generate.