Question: Foothill Construction uses the allowance method for bad debts. If management is overly pessimistic about its ability to collect customer accounts, the company will overstate

Foothill Construction uses the allowance method for bad debts. If management is overly pessimistic about its ability to collect customer accounts, the company will

overstate Bad Debt Expense and:

Multiple Choice

understate net income and days to collect will increase.

understate net income and days to collect will decline.

overstate net income and days to collect will increase.

overstate net income and days to collect will decline.

Foothill Construction uses the allowance method for bad debts. If management

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