Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 14 - No. 24)
What is the main effect of writing off an irrecoverable debt on the income statement?
An increase in net income.
A decrease in the cost of goods sold.
A decrease in net income.
No impact on net income.
Explanation
Writing off a bad debt results in a loss (bad debt expense), which decreases net income.
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