Question

when using the allowance method the write-off of a receivable A.) involves a contra-revenue account B.)...

when using the allowance method the write-off of a receivable
A.) involves a contra-revenue account
B.) decreases net income
C.) affects the net realizable value of accounts receivable
D.) reduces the amount of the allowance for bad debts account
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Answer #1

Ans:D

reduces the amount of the allowance for bad debts account.

Reason:

when using the allowance method the write-off of a receivable it affects the balance sheet item i.e,

Allowance for doubtful a/c

Accounts receivable

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