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Homework answers / question archive / 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

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

Finance

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?

 

    1. Decrease in net income; no effect on total assets
    2. No effect on net income; no effect on total assets
    3. Decrease in net income; decrease in total assets
    4. Increase in net income; no effect on total assets
    5. No effect on net income; decrease in total assets

Option 1

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