Zorro Company has significant amounts of accounts receivable, and experiences bad debts from time to time. Zorro uses the direct write- off method. When Zorro Company writes off a bad debt, what is the effect of that single transaction?

Question

Quizplus · Accepted Answer

When Zorro Company writes off a bad debt using the direct write-off method, it records the bad debt as an expense, which reduces profit.

Zorro Company Has Significant Amounts of Accounts Receivable, and Experiences