Question

Which of the following statements is false? Multiple Choice The journal entry to record bad debt expense decreases current assets. The journal entry to write off an uncollectible account receivable does not affect current assets. The journal entry to record bad debt expense decreases retained earnings. The journal entry to write off an uncollectible account receivable decreases operating income.

Answer 1

Answer:

The journal entry to write off an uncollectible account receivable decreases operating income.

Explanation:

Accounts receivable is the amount that debtors owe a business and is collectible at a particular time in the future. If however the debtor is unable to make payment, the amount owed is written of.

The journal entry to record the write-off involves a debit to accounts recievable and reduces allowance for uncollectible account balances.

This does not affect the operating income of the business.