The year-end adjusting entry to record bad debt expense will increase which of the following ratios?
A)Current.
B)Quality of income.
C)Quick.
D)Net profit margin.

Question

Quizplus · Accepted Answer

The year-end adjusting entry to record bad debt expense would increase the expense and reduce the net income. This would have a negative impact on the quality of income ratio as it measures the amount of sustainable income earned by the company. This is because bad debt expense is not a normal operating expense and is not expected to be recurring.

The Year-End Adjusting Entry to Record Bad Debt Expense Will