What do you think "An increase in provision for bad debt will"?

it will decrease the income

Correct answer is 1. Decrease Net Income

1- Decrease Net Income-------

Option No.1, Net Income will decrease

it will increase liability

DR. expenses

GR. provision for bad debt

so, the answer is decrease net income and increase in liability 

1 It will decrease the income because its charge to profit and loss account

1 for sure! It will DEBIT bad debt expense while CREDITING the contra-asset account of provision. Hence, decreasing the net income.

It will decrease the value of debtors. Would decrease the net income. 

1. Decrease Net Income

The increased portion will be charged as expense in the income statement thereby reducing net income.