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How can direct write off receivable under direct method affect. Current ratio 1- increase 2- decrease 3-no effect

Accounting Auditing Financial Accounting Financial Analysis Banking
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Question added by mohamed Hakim CMA CPA Candidate , Accounting Manager , Andersen saudi arabia
Date Posted: 2015/01/21
Upvote (2) Views (12) Followers (11) Answers (11) Report Question
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Asim Azaldeen Abdalrahman Mhammed
by Asim Azaldeen Abdalrahman Mhammed , Property Manager , TAAM PROPERTY

decrease

Waqas Raza Khan
by Waqas Raza Khan , Accountant , Cold Store Group of Saudi Arabia

Option2----Decrease

Deleted user
by Deleted user

OPTION2

Mir Mujtaba Ali
by Mir Mujtaba Ali , Internal Audit Manager , Confidential

Current ration Decreases (2)

mohamed Hakim CMA CPA Candidate
by mohamed Hakim CMA CPA Candidate , Accounting Manager , Andersen saudi arabia

Good answers 

Thanks 

VENKITARAMAN KRISHNA MOORTHY VRINDAVAN
by VENKITARAMAN KRISHNA MOORTHY VRINDAVAN , Project Execution Manager & Accounts Manager , ALI INTERNATIONAL TRADING EST.

Debit to Bad Debts

Credit to Receivable

Expense shown in the income statement

Current asset get reduced.

in effect: Current ratio also to Decrease:  Answer option (2) Decrease.

AHSAN SIDDIQUI
by AHSAN SIDDIQUI , Financial Analyst , BASE CAMP DATA SOLUTION

answer option2

 

Salah Othman Yousef Alshambaati
by Salah Othman Yousef Alshambaati , مدير ادارة الحسابات , شركة انفال الجديدة للتجارة والمقاولات

2------- decrease

Tanveer Qureshi
by Tanveer Qureshi , Director , Qureshi Associates

Current Ratio will decrease.

Ayman Esa Mustafa Farrag
by Ayman Esa Mustafa Farrag , مدير مالي , شركة الصفوف

2 is correct,,,,,,,,,,,,,,,,,

FITAH MOHAMED
by FITAH MOHAMED , Financial Manager , FUEL AND ENERGY CO for transportion petroleum materials

2- .>>>>>>>>>>>>>>>decrease

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