.The company's expenses (including bad debt expense)were $7,300 in Q1 and $6,900 in Q2.If the company raised its bad debt expense estimate by $800 in Q1 and lowered it by $800 in Q2,which of the following would be true assuming all else equal?

Question

Quizplus · Accepted Answer

If the company raises its bad debt expense estimate by $800 in Q1, its Q1 expenses increase by $800, resulting in a decrease in net income of $800. If the company lowers its bad debt expense estimate by $800 in Q2, its Q2 expenses decrease by $800, resulting in an increase in Q2 net income of $800. Therefore, the net effect on net income is a decrease of $800 in Q1 and an increase of $800 in Q2, leading to a total impact of zero on the company's overall net income. Therefore, the correct answer is C.

The Company's Expenses (Including Bad Debt Expense)were $7,300 in Q1