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Nookie1986 [14]
4 years ago
8

On October 12 of the current year, a company determined that a customer's account receivable was uncollectible and that the acco

unt should be written off. Assuming the direct write-off method is used to account for bad debts, what effect will this write-off have on the company's net income and total assets?
a. Decrease in net income; no effect on total assets.
b. No effect on net income; no effect on total assets.
c. Decrease in net income; decrease in total assets.
d. Increase in net income; no effect on total assets.
e. No effect on net income; decrease in total assets.
Business
1 answer:
juin [17]4 years ago
4 0

Answer:

Correct option is C.

<u>Decrease in net income; decrease in total assets.</u>

Explanation:

Under write off under direct method, Entry should be

Bad debt expense debit and account receivable credit

So effect is decrease net income, and decrease total assets .

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