Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 17 - No. 41)
If an irrecoverable debt is written off, what is the impact on net working capital?
Increases.
Decreases.
No impact.
Cannot be determined.
Explanation
The write-off decreases both accounts receivable and the allowance for doubtful accounts, therefore there is no net effect on working capital.
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