If It Is Known That a Debtor Cannot Pay Because

Multiple Choice

If it is known that a debtor cannot pay because of bankruptcy,the amount to be written off is shown as:

A) A credit on the income statement, as a negative expense, and as a debit on the balance sheet
B) A credit on the income statement and as a debit on the statement of financial position by increasing the amount shown for receivables
C) A debit on the income statement and as a credit on the statement of financial position by reducing the amount shown for receivables
D) None of the above statements are correct