Reference no: EM132813397

Problem 1: When the allowance method of recognizing bad debts expense is used ,the entries at the time of collection of an account previously written off would

a. Decrease the allowance for doubtful accounts

b. Increase net income

c. Have no effect on the allowance for doubtful accounts

d. Have no effect on net income

Problem 2: An entity uses the allowance method to recognize doubtful accounts expense. What is the impact of a collection of an account previously written off?

a. No effect on both allowance for doubtful accounts and doubtful accounts expense

b. No effect on allowance for doubtful accounts and decrease in doubtful accounts expense

c. Increase in allowance for doubtful accounts and no effect on doubtful accounts expense

d. Increase in allowance for doubtful accounts and decrease in doubtful accounts expense