During the Current Year, TechCom Concluded That a Customer's $4,400

question 122

Multiple Choice

During the current year, TechCom concluded that a customer's $4,400 account receivable was uncollectible and that the account should be written off. What effect will this write-off have on TechCom's current year net income and balance sheet assuming the allowance method is used to account for bad debts?

• A) No effect on net income or on total assets
• B) Decrease in 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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