Pittsburgh Tours collected $190 on an account that had been directly written off the previous year. The journal entry to record the transaction would include:
A) a debit to Allowance for Doubtful Accounts.
B) a credit to Bad Debts Recovered.
C) a debit to Bad Debts Recovered.
D) a credit to Bad Debts Expense.

Question

Quizplus · Accepted Answer

When a previously written-off account is collected, it is recorded as a credit to Bad Debts Recovered, recognizing the recovery of the amount that was previously considered uncollectible.

Pittsburgh Tours Collected $190 on an Account That Had Been