After writing off a customer's account, a company using the allowance method subsequently collected the account in full. It should:

Question

Quizplus · Accepted Answer

When a company using the allowance method collects on an account previously written off, it first reverses the write-off by increasing Accounts Receivable and increasing the Allowance for Uncollectible Accounts (C), and then records the collection by increasing Cash and decreasing Accounts Receivable (A).

After Writing Off a Customer's Account, a Company Using the Allowance