A company collects an account receivable previously written off.Indicate how this transaction would affect (1)assets, (2)stockholders' equity,and (3)revenues.

Question

Quizplus · Accepted Answer

When a previously written-off account receivable is collected, it does not affect the financial statements because the write-off and subsequent collection are both adjustments to the allowance for doubtful accounts and accounts receivable, which are balance sheet accounts. There is no impact on revenues or stockholders' equity.

A Company Collects an Account Receivable Previously Written Off