During 2016, a company wrote off $7,500 in uncollectible accounts receivable. At the end of the...
During 2016, a company wrote off $7,500 in uncollectible accounts receivable. At the end of the year, bad debt expense was estimated using a percent of gross sales. In 2017, the company collected $1,500 from an account that was written off in 2016. Recording this collection would include
a) a decrease to gross receivables.
b) a debit to Retained Earnings.
c) a credit to Allowance for Doubtful Accounts.
d) an increase to net receivables.
Homework Answers
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Option C When 7,500 was written off, the entry would have been Allowance for Doubtful Accounts Dr Accounts Receivable Cr. This will be reversed for 1,500 collected Accounts Receivable Dr Allowance for Doubtful Accounts Cr |
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