What effect does the write-off of an account receivable have on the Statement of Cash Flows?
A) A decrease to operating cash flows under the direct method.
B) A decrease to operating cash flows under the indirect method.
C) A decrease to financing cash flows.
D) There is no effect.

Question

Quizplus · Accepted Answer

The write-off of an account receivable is a non-cash transaction that affects the allowance for doubtful accounts and accounts receivable on the balance sheet but does not impact the cash flow statement.

What Effect Does the Write-Off of an Account Receivable Have