On October 29 of the Current Year, a Company Concluded

question 100

Multiple Choice

On October 29 of the current year, a company concluded that a customer's $4,400 account receivable was uncollectible and that the account should be written off. What effect will this write-off have on this company's net income and total assets assuming the allowance method is used to account for bad debts?

• 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:

Mental Illnesses

A wide range of mental health conditions that affect mood, thinking, and behavior.

Psychological Disorder

A pattern of behavior or thought that causes significant distress or impairment in personal functioning, recognized by the mental health community.

Percentage

A proportion or share in a whole, expressed as a fraction of 100.

Bipolar Disorder

A mental health condition marked by extreme mood swings from high (mania) to low (depression).