During the current year, TechCom concluded that a customer's $4,400 accountreceivable was uncollectible and that the account should be written off. What effect will this write-off have on TechCom's current year net income and balance sheet assumingthe allowance method is used to account for bad debts?

Question

Quizplus · Accepted Answer

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

During the Current Year, TechCom Concluded That a Customer's $4,400