On December 1,Year 1,Anson's Drug Store concluded that a customer's $325 account receivable was uncollected and that the account should be written off.What effect will this write-off have on the company's Year 1 net income and balance sheet totals,assuming that the direct write-off method is used to account for bad debts?

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The direct write-off method does not provide for estimating bad debt expense or creating an allowance for doubtful accounts, as such, the write-off of an uncollected account will directly decrease the accounts receivable balance and the company's total assets. This will also result in a decrease in net income as the bad debt expense was not previously recognized in Year 1.

On December 1,Year 1,Anson's Drug Store Concluded That a Customer's