If their bonuses are based on net income, managers may:

A) postpone writing off bad debts.
B) increase depreciation.
C) postpone dividend payments.
D) hold more inventory.

Net Income

The net income of a company, calculated by subtracting all costs and taxes from its total revenue.

Writing Off

The accounting action of declaring an asset to be of no value and clearing it off the books, often due to irrecoverability or obsolescence.

Bad Debts

Amounts owed to a company that are not expected to be paid, often resulting from credit sales to customers who are unable to fulfill their financial obligations.