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?
A) Debit Allowance for Doubtful Accounts, credit Accounts Receivable.
B) Debit Allowance for Doubtful Accounts, credit Bad Debt Expense.
C) Debit Bad Debt Expense, credit Allowance for Doubtful Accounts.
D) Debit Accounts Receivable, credit Allowance for Doubtful Accounts.

Question

Quizplus · Accepted Answer

When using the allowance method and an account receivable is written off, the allowance for doubtful accounts is debited and accounts receivable is credited. When the account is eventually collected, accounts receivable is debited and allowance for doubtful accounts is credited. Choice A and B are incorrect because they involve the allowance for doubtful accounts being debited twice. Choice C is incorrect because it involves recording an expense rather than a collection of accounts receivable.

Which of the Following Is Included in the Normal Journal