When using the allowance method,the receipt of a payment on receivables that have been written-off requires an entry to reverse the write-off to the Allowance for Bad Debts account and an entry to record the receipt of cash.

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This statement is true. When using the allowance method, a payment received on a written-off receivable requires an entry to reverse the write-off by debiting the Allowance for Bad Debts account and crediting the Accounts Receivable account. An entry is also made to record the receipt of cash by debiting the Cash account and crediting the Accounts Receivable account.

When Using the Allowance Method,the Receipt of a Payment on Receivables