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How Are Net Income and the Accounts Receivable Turnover Ratio

Question 101

Multiple Choice

How are net income and the accounts receivable turnover ratio affected when a customer account balance,which is known to be uncollectible,is written off? Assuming the company is using allowance method.


A) Net income and accounts receivable turnover ratio decrease
B) Net income decreases; no change in accounts receivable turnover ratio
C) No change in net income; accounts receivable turnover ratio decreases
D) No change in net income or accounts receivable turnover ratio

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