Collection of accounts receivable that previously have been written off results in an increase in cash and an increase in:

Question

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When a company collects on accounts receivable that had previously been written off, it reverses the write-off by increasing (debiting) cash and increasing (crediting) the allowance for uncollectible accounts. This action restores the allowance account to its previous level before the write-off, but does not affect accounts receivable directly, bad debts expense, or retained earnings.

Collection of Accounts Receivable That Previously Have Been Written Off