On October 12 of the Current Year, a Company Determined

question 68

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

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Definitions:

Hardy Personalities

Individuals who exhibit resilience and a positive attitude in the face of stress and adversity.

Promotion-Related Stress

The stress experienced either in the pursuit of a promotion or as a result of the challenges associated with a new, higher-level position.

Strain Reactions

Negative physical or emotional responses that occur when the demands of a task exceed an individual's ability to cope.

Personality Hardiness

A personality characterized by commitment, control, and challenge and, hence, resistant to distress.