Collections of accounts receivable that previously have been written off are credited to:

Question

Quizplus · Accepted Answer

Collections of accounts receivable that have been previously written off are credited to the Accounts Receivable account, as they are reducing the amount of outstanding receivables that the company is owed. Option A is incorrect because gains typically result from events such as the sale of assets or successful investments - the collection of previously written-off receivables would not be considered a gain. Option C is incorrect because Bad Debt Expense is typically debited when receivables are written off, not when they are collected. Option D is incorrect because the collection of previously written-off receivables does not impact Retained Earnings.

Collections of Accounts Receivable That Previously Have Been Written Off