To record receipt of money after an account has been written off using the direct method in the previous year,you would need to:
A)credit cash.
B)debit the allowance account.
C)credit Bad Debts Recovered.
D)All of the above.

Question

Quizplus · Accepted Answer

When an account has been written off, the Bad Debts expense has already been recognized and the Allowance account has been debited in the previous year. Therefore, to record receipt of money after the account has been written off, the Bad Debts Recovered account should be credited. This will offset the original charge to Bad Debts and result in recognition of the cash received without affecting the previous year's Allowance account balance. There is no need to debit the Allowance account or credit cash as these transactions have already been completed in the previous year.

To Record Receipt of Money After an Account Has Been