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An increase in provision for bad debt will - (A. Decrease net income)
Options A and D are the right answers.
It will decrease net income option A correct answer..................,,
Option A, Since it is charged to Statement of Comprehensive Income and this will reduce net income.
Correct Answer is D) Increase liabilities. An increase in provision means increase liabilities.
The answer is A. Decreases net income.
Increase in provision of bad debt could be recorded using debit to bad debt expense (doubtful accounts) and credit to either Allowance for bad debts or Accounts receivable depending on the method used in recording such transactions.
Decrease net Income
increase in bed debt expense can Decrease net income
