Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 40 - No. 2)
What is the impact on the statement of financial position when a debt is written off?
Total assets increase
Total assets decrease
No impact on total assets
Liabilities decrease.
Explanation
Writing off a debt reduces both an asset (accounts receivable) and a contra-asset (allowance for doubtful accounts), so there is no change in total assets.
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