On June 20 of the prior year, a company determined that a customer's account receivable was uncollectible and that the account should be written off. Unexpectedly, on September 1 of the current year, the customer paid the account in full. Assuming the allowance method is used to account for bad debts, what effect will this recovery have on the company's net income and total assets?
A. No effect on net income; decrease in total assets.
B. Decrease in net income; decrease in total assets.
C. Decrease in net income; no effect on total assets.
D. No effect on net income; no effect on total assets.
E. Increase in net income; no effect on total assets.
Answer: D
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