How Are Net Income and the Accounts Receivable Turnover Ratio

question 101

Multiple Choice

How are net income and the accounts receivable turnover ratio affected when a customer account balance,which is known to be uncollectible,is written off? Assuming the company is using allowance method.

• A)Net income and accounts receivable turnover ratio decrease
• B)Net income decreases; no change in accounts receivable turnover ratio
• C)No change in net income; accounts receivable turnover ratio decreases
• D)No change in net income or accounts receivable turnover ratio