Question
Porous inc uses the allowance method to account for bad debts. During 2014, trophy inc went bankrupt, and porous inc wrote off that customers accounts
Porous inc uses the allowance method to account for bad debts. During 2014, trophy inc went bankrupt, and porous inc wrote off that customers accounts receivable of $12,000. Which of the following describes the effect to this write off journal entry on the 2014 financial statement for porous inc.
A.Total assets will decrease and total expense will decrease
B. the write off has no effect on total assets or on total expenses
C. total assets will decrease and total expenses will increase
D. total assets will increase and total expenses will decrease
E. total assets will increase and total expenses will increase
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