Polo, Inc Uses the Allowance Method of Accounting for Bad Debts

Multiple Choice

Polo, Inc. uses the allowance method of accounting for bad debts. During July, Torey's account was written off as uncollectible. The write-off of Torey's account

A) increases both the current and quick ratios.
B) decreases the current ratio and has no effect on the quick ratio.
C) has no effect on the current and quick ratios.
D) increases the current ratio and has no effect on the quick ratio.