A Company Uses the Direct Write-Off Method to Account for Bad

question 114

Multiple Choice

A company 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 Stockholders' equity decrease
• C)Stockholders' equity and liabilities decrease
• D)Assets increase and Stockholders' equity decrease