Under the allowance method,when a receivable that had been previously written off is collected:
A)Income is recognized.
B)An expense is reduced.
C)Net income is not affected.
D)Net assets are increased.

Question

Quizplus · Accepted Answer

When a receivable that had been previously written off is collected under the allowance method, the collection is recorded by reversing the write-off and recognizing the cash receipt. This process does not affect net income because the expense was recognized when the receivable was initially written off, and the recovery simply reverses this. Net income remains unchanged.

Under the Allowance Method,when a Receivable That Had Been Previously