When a company that uses the allowance method writes off an actual bad debt:
A)total assets decrease.
B)total liabilities increase.
C)total expenses increase and total revenues increase.
D)total assets,revenues,and expenses remain the same.

Question

Quizplus · Accepted Answer

When a company writes off a bad debt using the allowance method, it reduces both the accounts receivable and the allowance for doubtful accounts, leaving total assets, revenues, and expenses unchanged.

When a Company That Uses the Allowance Method Writes Off