An increase in provision for bad debt will ?

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..................,,

It will decrease the net income since it is subtracted from the gross profit as an operating expense

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.

It will give two effect...the one is decrease net income as an provision expensed...and another is increase your liability...(or directly deducted from trade debtors)...

Decrease net Income

 

increase in bed debt expense can Decrease net income

Option A) decrease net income