The collection of an account that had been previously written off under the allowance method of accounting for uncollectibles

Question

Quizplus · Accepted Answer

The collection of an account previously written off does not affect profit because the write-off and subsequent collection are balance sheet transactions. The write-off reduces accounts receivable and the allowance for doubtful accounts, while the collection reverses this, with no impact on the income statement.

The Collection of an Account That Had Been Previously Written