Question

Under the allowance method, writing off an uncollectible account Select one: a. affects only income statement accounts. b. affects both balance sheet and income statement accounts. c. does not affects any income statement accounts. d. is not acceptable practice.

Answer 1

a. affects only income statement accounts.

Step-by-step explanation:

Under the allowance method, writing off an uncollectible account affects only income statement accounts.

When a customer's debt won't be paid off, it's time to call it quits. To write off a failed account, the amount gets taken away from accounts receivable. The finance record is changed by decreasing allowance for doubtful accounts and increasing accounts receivable - consequence: just balance sheet accounts are influenced.