There are two methods for accounting for uncollectible accounts receivable, direct write-off and the allowance method. Under the allowance method, the write-off of a specific accounts receivable:

Please add checkmark next to the correct answer(s).

1decreases net income and decreases accounts receivable.

2decreases net income and decreases working capital.

3affects neither net income nor accounts receivable.

4affects neither net income nor working capital.

5increases bad debt expense and increases the allowance for doubtful accounts.