A company uses the allowance method to account for uncollectible accounts receivables. When the firm writes off a specific customer's account receivable
A) total current assets are reduced
B) total expenses for the period are increased
C) net realizable value of accounts receivable increases
D) there is no effect on total current assets or total expenses

Question

Quizplus · Accepted Answer

When a specific account is written off under the allowance method, the allowance for doubtful accounts is reduced, and accounts receivable is reduced by the same amount, leaving total current assets and total expenses unchanged.

A Company Uses the Allowance Method to Account for Uncollectible