A Company with Significant Amounts of Accounts Receivable, Experiences Uncollectible

Multiple Choice

A company with significant amounts of accounts receivable, experiences uncollectible accounts from time to time. If the company uses the direct write-off method, the effect of writing off of an uncollectible receivable will be a(n) :

A) reduction in net income.
B) nil on net income.
C) increase in total assets.
D) generation of positive cash flow.