There is no effect on the accounting equation if a company does not write off specific, non-paying customers' accounts receivable.
The amount of money owed to a business for delivered or used but unpaid goods or services is known as accounts receivable (AR). The balance sheet classifies accounts receivable as a current asset. Any money owing by clients for purchases is done using credit known as AR.
What Distinguishes Receivables From Accounts Payable?
Receivables are assets that the company records as money owed to it for services delivered. On the other hand, accounts payable indicate money that the company owes to other parties. For instance, payments owed to creditors or suppliers. Liabilities are recorded for payables.
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