Problem
On October 17 of the current year, a company determined that a customer's account receivable was uncollectible and that the account should be written off. Assuming the allowance method is used to account for bad debts, what effect will this write-off have on the company's net income and total assets?
A. Increase in net income; no effect on total assets.
B. Decrease in net income; decrease in total assets.
C. No effect on net income; no effect on total assets.
D. No effect on net income; decrease in total assets.
E. Decrease in net income; no effect on total assets.