When an adjusting entry is made in anticipation of some receivables being uncollectible,the adjustment:
A)reduces both net income and net accounts receivable.
B)reduces net income and increases liabilities.
C)reduces net accounts receivable and increases liabilities.
D)reduces net income and selling expenses.

Question

Quizplus · Accepted Answer

The adjustment for uncollectible receivables involves recording bad debt expense, which reduces net income, and creating an allowance for doubtful accounts, which reduces net accounts receivable.

When an Adjusting Entry Is Made in Anticipation of Some