The Adjustment for Bad Debts Using the Percentage of Receivables

question 5

Multiple Choice

The adjustment for bad debts using the percentage of receivables ignored the credit balance in the Allowance account.This error would cause:

• A)total assets to be overstated.
• B)total liabilities to be understated.
• C)net income to be understated.
• D)None of these are correct.

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