A customer pays on a specific account that the company had previously written off as uncollectible. The journal entry to record the reinstatement under the allowance method includes a(n):
A) decrease to Cash.
B) decrease to Sales.
C) increase to Allowance for Doubtful Accounts.
D) decrease to Bad Debts Expense.

Question

Quizplus · Accepted Answer

When a company reinstates an account previously written off, it increases the Allowance for Doubtful Accounts to reflect the recovery of the account before recording the cash receipt.

A Customer Pays on a Specific Account That the Company