Gideon Company uses the allowance method of accounting for uncollectible accounts. On May 3, the Gideon...

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Gideon Company uses the allowance method of accounting for uncollectible accounts. On May 3, the Gideon Company wrote off the

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

business accounting

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Answer 1

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Answer #1

Under the allowance method, when a bad debt is recovered, two journal entries are made: First to reinstate the account of the customer and second to receive cash from the customer.

Hence, when $2,000 already written off uncollectible amount is recovered from A. Hopkins, following two journal entries will be made:

July 10	Accounts receivables - A. Hopkins	2,000
	Allowance for doubtful accounts		2,000
July 10	Cash	2,000
	Accounts receivables - A. Hopkins		2,000

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Answer 2

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