Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 25 - No. 34)
Which financial statement is directly impacted by writing off an irrecoverable debt?
The balance sheet, increasing assets.
The income statement, decreasing net income.
The statement of cash flows.
The statement of retained earnings.
Explanation
Writing off an irrecoverable debt reduces the net income due to the recognition of a bad debt expense.
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