If the allowance method is used and an account receivable that had been previously written-off is collected, income is currently recorded.

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Quizplus · Accepted Answer

When an account previously written off is collected, it does not affect income. Instead, it reverses the write-off by debiting accounts receivable and crediting the allowance for doubtful accounts, maintaining the integrity of the income statement.

If the Allowance Method Is Used and an Account Receivable