Archer Company has significant amounts of accounts receivable, and experiences bad debts from time to time. Archer uses the ageing- of- accounts method to account for bad debts. When Archer Company writes off an uncollectable receivable, what is the effect of that single transaction?

Question

Quizplus · Accepted Answer

Writing off an uncollectable receivable using the ageing-of-accounts method does not affect profit, as the expense was already recognized when the allowance for doubtful accounts was established.

Archer Company Has Significant Amounts of Accounts Receivable, and Experiences