Question

Accounts receivable had a debit balance of $10,000 at the beginning of the period, and a debit balance of $6,000 at the end of the period. Based on this information, the adjustment to net income for the period will be reported as:______
a. a decrease of $4,000 which will be added to net income
b. an increase of $4,000 which will be subtracted from net income
c. a decrease of $4,000 which will be subtracted from net income
d. an increase of $4,000 which will be added to net income

Answer 1

Answer:

d. an increase of $4,000 which will be added to net income

Explanation:

The difference in the Balance of Trade Receivables represents the Credit Sales made during the year. Credit Sales are recorded in the Income statement.