Which one of the following does not reflect the correct effect of an increase in provision...
Which one of the following does not reflect the correct effect of an increase in provision for bad debts on the financial statements?
a- expenses will increase
b- profit will decrease
c= assets will increase
d- equity will decrease
Homework Answers
c= assets will increase. Correct Option
If the provision for bad debts increases then there is higher expense reported as a result profits are decreased. Equity is also decreased.
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