Under the allowance method,when a specific account is written off,
A)total assets will be unchanged.
B)total assets will decrease.
C)net income will decrease.
D)total assets will increase.

Question

Quizplus · Accepted Answer

Writing off a specific account under the allowance method involves removing the amount from the accounts receivable balance and recording it as a bad debt expense. This results in a decrease in both accounts receivable and net income, but because the allowance account was set up to accommodate such losses, there is no impact on total assets.

Under the Allowance Method,when a Specific Account Is Written Off