Halsted Inc.uses the allowance method.Previously,the company had written off the account of S.Bullock in full.Nine months later,Halsted collected $1,700,the full amount due,from S.Bullock.How would Halsted Inc.record this transaction?
A)Debit Bad Debt Expense for $1,700 and credit Accounts Receivable-S.Bullock for $1,700.
B)Debit Accounts Receivable-S.Bullock for $1,700 and credit Bad Debt Expense for $1,700.
C)Debit Accounts Receivable-S.Bullock for $1,700,credit Bad Debt Expense for $1,700,debit Cash for $1,700,and credit Accounts Receivable-S.Bullock for $1,700.
D)Debit Accounts Receivable-S.Bullock for $1,700,credit Allowance for Doubtful Accounts for $1,700,debit Cash for $1,700,and credit Accounts Receivable-S.Bullock for $1,700.
E)Debit Cash for $1,700 and credit Accounts Receivable-S.Bullock for $1,700.

Question

Quizplus · Accepted Answer

When a previously written-off account is collected, the entry involves reversing the write-off by debiting Accounts Receivable and crediting Allowance for Doubtful Accounts, then recording the collection by debiting Cash and crediting Accounts Receivable.