When an Account Becomes Uncollectible and Must Be Written Off

question 181

Multiple Choice

When an account becomes uncollectible and must be written off

• A)Allowance for Doubtful Accounts should be increased.
• B)Accounts Receivable should be decreased.
• C)Bad Debt Expense should be decreased.
• D)Sales Revenue should be decreased.

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Definitions:

Current Asset

An asset likely to be converted into cash within a year, used in the normal operations of a business.

Plant Asset

A long-term physical asset that is used as part of a company's operations to help in generating revenues, similar to a fixed asset but specifically related to manufacturing.

Land

Real property consisting of natural resources and geographic space, which has various uses such as agricultural, commercial, or residential.

Unearned Revenues

Income received by an individual or company for a service or product that has yet to be provided or delivered.