On October 12 of the Current Year,a Company Determined That

question 4

Multiple Choice

On October 12 of the current year,a company determined that a customer's account receivable was uncollectible and that the account should be written off.Assuming the allowance method is used to account for bad debts,what effect will this write-off have on the company's net income and total assets?

• A)Decrease in net income; no effect on total assets.
• B)No effect on net income; no effect on total assets.
• C)Decrease in net income; decrease in total assets.
• D)Increase in net income; no effect on total assets.
• E)No effect on net income; decrease in total assets.

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Definitions:

Online Auctions

A virtual marketplace where buyers bid for products or services offered for sale over the internet, with the highest bid at auction close winning the item.

Discontinued Inventory

Stock items that are no longer being produced or supplied by the manufacturer.

Supply Chain

The network of all activities, individuals, resources, and technology involved in the creation and sale of a product, from raw materials to delivery to the end user.

Warehousing

The act of storing goods in a large building or warehouse for distribution, sale, or future use.