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Which of the following is the effect on net income if...

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Accounting
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Which of the following is the effect on net income if a business decreases its provision for bad debts?

Answer & Solution
Correct Answer: Option A
Net income will increase is the effect on net income if a business decreases its provision for bad debts.
Examveda
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2 Comments
Examveda
Examveda 9 years ago
Provision for bad debt is expense, expenses charged on debit side of profit and loss account which decrease the net income. If there is decrease in provision means earlier provision is higher than now so which we book earlier as expense now we have to book it as revenue in profit and loss account so It will increase net income.
Ritika Upadhyay
Ritika Upadhyay 9 years ago
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