Summers, Inc. uses the allowance method to account for bad debts. The entry to record the write-off of a customer's account balance decreases
A) assets and owners' equity.
B) assets and decreases liabilities.
C) owners' equity and revenues.
D) none of these answers is correct.

Question

Quizplus · Accepted Answer

The write-off of a customer's account balance using the allowance method does not affect the overall assets or owners' equity because it involves reducing both accounts receivable and the allowance for doubtful accounts, which are both asset accounts.