On October 17 of the Current Year,a Company Determined That

question 89

Multiple Choice

On October 17 of the current year,a company determined that a customer's account receivable was uncollectible and that the account should be written off.Assuming the allowance 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.

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Definitions:

Lead Times

The total time that elapses between the initiation of a process and its completion, often critical in manufacturing, supply chain management, and project planning.

Lot-For-Lot

Lot-for-lot ordering is an inventory management technique where the order quantity is set equal to the demand for the next period, optimizing inventory levels and reducing holding costs.

EOQ

Economic Order Quantity; a model used in inventory management to determine the optimal order size that minimizes total holding costs and ordering costs.

Setup Cost

The expenses incurred in preparing equipment or processes for a production run or the start of an operation.