Under the Direct Write-Off Method, the Entry to Record an Uncollectible

question 18

Multiple Choice

Under the direct write-off method, the entry to record an uncollectible account has the following effect on the financial statements:

• A)increases expenses and decreases liabilities.
• B)decreases assets and increases owner's equity.
• C)decreases net income and decreases assets.
• D)increases expenses and increases assets.

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Definitions:

Deontological Theory

An ethical philosophy that evaluates actions as right or wrong based on adherence to rules, duties, or moral principles, regardless of the consequences.

Decisions

Resolutions or conclusions reached after consideration or deliberation by individuals, groups, or organizations.

Action

The process or state of acting or being active; a deed or movement.

Stakeholder Theory

A management concept that asserts that the interests of all stakeholders, not just shareholders, should be considered in the decision-making process of an organization.