Question

Gideon Company uses the allowance method of accounting for uncollectible accounts. On May 3, the Gideon Company wrote off the $2,000 uncollectible account of its customer, A. Hopkins. On July 10, Gideon received a check for the full amount of $2,000 from Hopkins. On July 10, the entry or entries Gideon makes to record the recovery of the bad debt is: 

A)  

Allowance for Doubtful Accounts	2,000
Accounts Receivable-A. Hopkinse		2,000
Accounts Receivable-A. Hopkins	2,000
Cash		2,000

B)  

Cash	2,000
Accounts Receivable-A. Hopkins		2,000

C)   

Accounts Receivable-A. Hopkins	2,000
Allowance for Doubtful Accounts		2,000
Cash	2,000
Accounts Receivable-A. Hopkins		2,000

D) 

Accounts Receivable-A. Hopkins	2,000
Bad debts expense		2,000
Cash	2,000
Accounts Receivable-A. Hopkins		2,000

E) 

Cash	2,000
Bad debts expense		2,000

Answer 1

Option C is the answer

To reinstate accounts receivable

Accounts Receivable	2,000
Allowance for Doubtful Accounts		2,000

To receive cash

Cash	2,000
Accounts Receivable		2,000