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)Profit margin.

Question

Quizplus · Accepted Answer

The year-end adjusting entry to record bad debt expense will increase the quality of income ratio. This ratio measures the proportion of a company's income that is derived from ongoing operations, as opposed to one-time events or non-operating income. By increasing the amount of bad debt expense, the company is reducing its net income, which in turn increases the quality of income ratio.

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