Under the Allowance Method, When an Account Receivable Is Written

question 127

Multiple Choice

Under the allowance method, when an account receivable is written off, the journal entry:

• A) violates the matching principle.
• B) will decrease net income.
• C) will decrease total current assets.
• D) will have no effect on net accounts receivable.

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Definitions:

Comparative Balance Sheet

Financial statements that display the financial position of a company at different points in time side-by-side, to facilitate comparison.

Income Statement

An income statement is a financial document that reports a company’s financial performance over a specific accounting period, outlining revenues, expenses, and net income.

Additional Information

Supplementary data or facts that provide more context or clarification to the main content or findings.

Capital Expenditures

Funds used by a company to acquire or upgrade physical assets such as property, industrial buildings, or equipment.