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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Definitions:

Self-contained Units

Independent or autonomous units, often referring to organizational departments, housing, or equipment, that operate or function without the need for external inputs.

Product Design

The process of creating and developing a new product to be sold to customers, focusing on specifications, appearance, and functionality.

Network Design

The process of planning and implementing a computer network infrastructure that supports efficient data exchange and meets the specific requirements of an organization.

Functional Design

An approach to designing products, systems, or processes that emphasizes practicality and efficiency while fulfilling specific purposes.