Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 40 - No. 40)
Which of the following is a result of an increase to the allowance for doubtful accounts?
An increase in net income.
A decrease in net income.
No effect on net income.
An increase in total assets.
Explanation
The increase requires recognition of bad debt expense, which lowers net income.
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