Question

On October 29 of the current year, a company concluded that a customer's $4,400 account receivable was uncollectible and that the accounts should be written off. What effect will this write-off have on this company's net income and total assets assuming the allowance method is used to account for bad debts

Answer 1

No effect on the net income , no effect in total assets

Step-by-step explanation:

In the context, it is given that an amount of $ 4,400 of a customer was uncollectible and the so the account would be written off.

So when the account receivable written off , then the entry of the account will be the allowance for doubtful accounts debited and the account receivable will be credited. So there will be no effect on the assets and there is no effect on the net income.