On November 2, 2014, Quaint General Store concluded that a customer's $400 account receivable was uncollectible and that the account should be written off.What effect will this writeoff have on Quaint's 2014 net income and balance sheet totals assuming the allowance method is used to account for bad debts?

Question

On November 2, 2014, Quaint General Store concluded that a customer's $400 account receivable was uncollectible and that the account should be written off.What effect will this write­off have on Quaint's 2014 net income and balance sheet totals assuming the allowance method is used to account for bad debts?

Quizplus · Accepted Answer

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 set up.

On November 2, 2014, Quaint General Store Concluded That a Customer's