Forrest Corporation Uses the Direct Write-Off Method to Account for Bad

question 83

Multiple Choice

Forrest Corporation uses the direct write-off method to account for bad debts. What are the effects on the accounting equation of the entry to record the write-off of a customer's account balance?

• A) Assets and liabilities decrease
• B) Assets and equity decrease
• C) Equity and liabilities decrease
• D) Assets increase and equity decrease

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Definitions:

Safeguards

Measures or mechanisms put in place to protect against potential harm or ensure security.

Lucrative

Generating a significant profit or financial gain, often used to describe business ventures or investments.

CRM Program

A strategy and software system designed to manage a company’s interactions with current and potential customers, aiming to improve business relationships.

Lifetime Value

The total revenue a business can expect from a single customer throughout the duration of their relationship.