Archer Company Has Significant Amounts of Accounts Receivable,and Experiences Uncollectible

question 57

Multiple Choice

Archer Company has significant amounts of accounts receivable,and experiences uncollectible accounts from time to time.Archer uses the percent-of-sales method to account for uncollectible accounts.When Archer Company writes off an uncollectible receivable,what is the effect of that single transaction?

• A) It will reduce net income.
• B) It will have no effect on net income.
• C) It will increase total assets of the company.
• D) It will generate negative cash flow.

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Definitions:

3-Bromopentane

An organic compound with a five-carbon chain and a bromine atom attached to the third carbon.

Pent-2-ene

An alkene with the formula C5H10, featuring a double bond between the second and third carbon atoms in the five-carbon chain.

Cyclohexanol

Cyclohexanol is a six-membered cyclic compound where one hydrogen atom is replaced by a hydroxyl group, primarily used as a precursor to nylon.

Sulfuric Acid

A strong mineral acid with the molecular formula H2SO4, widely used in industry and laboratory settings for its dehydrating, oxidizing, and sulfonating properties.