Under the allowance method of estimating bad debts expense, writing off a specific account reduces the firm's net assets.

Question

Quizplus · Accepted Answer

Under the allowance method, writing off a specific account does not affect the firm's net assets because the expense has already been estimated and recorded in advance, affecting only the allowance for doubtful accounts and accounts receivable, not the net assets.

Under the Allowance Method of Estimating Bad Debts Expense, Writing