The occurrence which most likely would have no effect on 2015 net income (assuming that all amounts involved are material) is the
A)sale in 2015 of an office building contributed by a stockholder in 1987.
B)collection in 2015 of a receivable from a customer whose account was written off in 2014 by a charge to the allowance account.
C)settlement based on litigation in 2015 of previously unrecognized damages from a serious accident which occurred in 2013.
D)worthlessness determined in 2015 of stock purchased on a speculative basis in 2011.

Question

Quizplus · Accepted Answer

The collection of a receivable that was previously written off does not affect net income, as it is recorded as a recovery of bad debts, which is a balance sheet adjustment.

The Occurrence Which Most Likely Would Have No Effect on 2015