An increase in the bad debt expense would NOT be caused by

Question

Quizplus · Accepted Answer

An increase in cash sales would not directly impact the bad debt expense as there is no credit extension involved. Bad debt expense is the expense incurred by a company due to non-payment of credit sales. Poor economic climate, an increase in credit sales, and a decrease in the quality of customers can all lead to an increase in bad debt expense as it becomes more difficult for customers to pay back their debts.

An Increase in the Bad Debt Expense Would NOT Be