San Francisco Tours collected $90 on an account that had been directly written off the previous year.The journal entry to record the transaction would include:

Question

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When a specific account has been previously written off as uncollectible and is later collected, the entry should include a credit to Bad Debts Recovered to reduce the previously recorded write-off and a debit to Accounts Receivable for the amount collected. No entry should be made to the allowance account at this time since the recovery of a specific write-off does not affect the estimate of future uncollectibles.

San Francisco Tours Collected $90 on an Account That Had