The collection of an account that had been previously written off under the allowance method for uncollectible accounts
A) will increase net income in the period it is collected.
B) will decrease net income in the period it is collected.
C) requires a correcting entry for the period in which the account was written off.
D) does not affect net income in the period it is collected.

Question

Quizplus · Accepted Answer

The collection of an account previously written off under the allowance method does not affect net income because the write-off and subsequent collection are balance sheet transactions, not income statement transactions.

The Collection of an Account That Had Been Previously Written