During the current year, Aqua Systems determined that John Smith's $2,600 account receivable was uncollectible and should be written off. Which of the following best describes the impact of this write off on the current year's income statement and balance sheet?

Question

Quizplus · Accepted Answer

When an account receivable is written off, it does not affect net income because the expense was already recognized when the allowance for doubtful accounts was established. It also does not affect total assets because the reduction in accounts receivable is offset by a reduction in the allowance for doubtful accounts.

During the Current Year, Aqua Systems Determined That John Smith's