S Ltd Has the Following Balance Sheet Information on 28

question 18

Multiple Choice

S Ltd has the following balance sheet information on 28 February 2016:
$

On 28 February 2016, the company receives notification from R Ltd that it has filed for bankruptcy. The controller of S Ltd decides to write off R Ltd's account for $10 600. Which of the following statements is true?

• A) Net income and net accounts receivable will decrease.
• B) Net income will decrease but no change will occur in net accounts receivable.
• C) No change will occur in net income but net accounts receivable will decrease.
• D) Neither net income or net accounts receivable will decrease.

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Definitions:

Preoperational Stage

A Piagetian stage of early childhood marked by the acquisition of mental representation and symbolic functions.

Semiotic Function

The ability of signs, symbols, or languages to represent objects, actions, ideas, or concepts indirectly, which is fundamental in communication and thinking.

Reversibility

The concept that certain processes can be undone, returning to the original state by reversing the process that caused the change.

Egocentrism

A cognitive bias where an individual has difficulty understanding or assuming any perspective other than their own, often discussed in the context of child development.