After a customer's account has been written off under the allowance method,the customer sends the company the amount owed.Before the receipt of cash can be recorded,the company must first:

Question

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When a customer's account is written off under the allowance method, it means that the company has already recognized the loss due to the uncollectible account by debiting the Bad Debt Expense and crediting the Allowance for Uncollectible Accounts. If the customer pays afterwards, it means that the company has overestimated the bad debt expense and the allowance for uncollectible accounts, and the amount received must be recorded as a credit to Accounts Receivable. Therefore, the correct answer is to debit Accounts Receivable to recognize the receipt of cash from the customer.

After a Customer's Account Has Been Written Off Under the Allowance