B. The Yummy Candy Company uses the direct write-off method in dealing with uncollectible accounts. Indicate the effects on net income and current assets of each of the following transactions. State your answers as: Increase, Decrease, or No effect. (30 points) Transaction Effect on Net Income Effect on Current Assets 1. Write off a customer's account. 2. Reinstate a customer's account 3. Collect in full the balance dueC. Matching (50 points) A cost to the seller of extending credit 2 A method of recording collection losses based on estimates made before identification of specific uncollectible accounts 3 A monetary claim against a business or an individual A method of accounting for uncollectible accounts by which the company waits until the credit department decides that a customer's account is uncollectible, and then writes it off directly to uncollectible-account expense 5 A written promise to pay a specified amount of money at a particular future date 6 The person or business that signs a note and promises to pay the amount required by the note agreement 7 The sum of the principal and interest due on the due date of a note 8 Selling a note receivable before its maturity 9 A potential liability that will become an actual liability only if a potential event does occur 10 A contra account to accounts receivable that holds the estimated amount of collection losses A. Allowance for uncollectible accounts B. Allowance method C. Receivable D. Direct write-off method E. Maturity value F. Contingent liability G. Maker of the note H. Promissory note 1. Uncollectible-account expense J. Discounting a note receivable