A company writes off a specific account as uncollectible,but later the customer pays.The journal entry to record the reinstatement under the allowance method includes a(n):
A)decrease to Cash.
B)decrease to Sales.
C)increase to Allowance for Doubtful Accounts.
D)decrease to Bad Debts Expense.

Question

Quizplus · Accepted Answer

The reinstatement of a previously written off account requires an increase to the allowance for doubtful accounts. There is no decrease to cash or sales, and bad debts expense is not affected by the reinstatement.

A Company Writes Off a Specific Account as Uncollectible,but Later