Which of the following statements is false? Recording the collection of a previously written-off account will...

Transcribed Image Text:

Which of the following statements is false? Recording the collection of a previously written-off account will not affect the income statement. Bad Debt Expense is a contra-account that is used to reduce accounts receivable to its net realizable value. Accounts Receivable are shown on the Balance Sheet at their Net Realizable Value. The direct write-off method of accounting for bad debt is allowed under GAAP, if the company's credit losses are immaterial. Which of the following statements is false? Recording the collection of a previously written-off account will not affect the income statement. Bad Debt Expense is a contra-account that is used to reduce accounts receivable to its net realizable value. Accounts Receivable are shown on the Balance Sheet at their Net Realizable Value. The direct write-off method of accounting for bad debt is allowed under GAAP, if the company's credit losses are immaterial.