Question

Which of the following is included in the normal journal entry to record the collection of accounts receivable previously written off when using the allowance method? Debit Allowance for Doubtful Accounts, credit Bad Debt Expense. Debit Allowance for Doubtful Accounts, credit Accounts Receivable. Debit Bad Debt Expense, credit Allowance for Doubtful Accounts. Debit Accounts Receivable, credit Allowance for Doubtful Accounts.

Answer 1

Answer:

Debit Accounts Receivable, credit Allowance for Doubtful Accounts.

Explanation:

To record the collection of accounts receivable previously written off when using the allowance method, the first step is  to debit Accounts Receivable, and then credit Allowance for Doubtful Accounts. This purpose of this to reverse the already written off amount.

The next step after that is to complete the entries by debiting Cash, and crediting the Accounts Receivable to record the cash collection in respect of previously written off accounts receivable.