On December 1, 2012, Alex's Drug Store concluded that a customer's $325 account receivable was uncollectible and that the account should be written off. What effect will this write-off have on Alex's 2012 net income and balance sheet totals assuming the allowance method is used to account for bad debts?

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Under the allowance method, writing off an uncollectible account does not affect net income or total assets because the bad debt expense was already recognized when the allowance was initially estimated.

On December 1, 2012, Alex's Drug Store Concluded That a Customer's