If the allowance method is used,the recovery of an account receivable previously written-off results in a gain being recorded on the income statement.

Question

Quizplus · Accepted Answer

The recovery of an account receivable previously written-off under the allowance method does not result in a gain being recorded on the income statement. Instead, it is recorded as a reduction of the allowance for doubtful accounts and an increase in accounts receivable.

If the Allowance Method Is Used,the Recovery of an Account