Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 38 - No. 27)
Which of the following is the effect of writing off an irrecoverable debt under the allowance method?
No effect on the total assets.
An increase in total assets.
A decrease in total assets.
A decrease in net income.
Explanation
Under the allowance method, the write-off affects accounts receivable and the allowance, so there is no net effect.
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