When using the allowance method,the write-off of a receivable ________.
A) involves a contra-revenue account
B) reduces the amount of the Allowance for Bad Debts account
C) decreases net income
D) affects the net realizable value of accounts receivable

Question

Quizplus · Accepted Answer

The allowance method involves estimating uncollectible accounts at the end of each period, which affects the Allowance for Bad Debts account. When a specific account is deemed uncollectible and written off, it reduces the balance of the Allowance for Bad Debts account but does not affect net income or the net realizable value of accounts receivable directly at the time of write-off.

When Using the Allowance Method,the Write-Off of a Receivable ________