Using the Allowance Method of Accounting for Uncollectible Receivables, the Entry

question 96

Multiple Choice

Using the allowance method of accounting for uncollectible receivables, the entry to reinstate a specific receivable previously written off would include a

• A) credit to Bad Debt Expense
• B) credit to Accounts Receivable
• C) debit to Allowance for Doubtful Accounts
• D) debit to Accounts Receivable

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Definitions:

Purchase Of Equipment

The acquisition of equipment that a business requires for its operations, treated as a capital expenditure.

Investing Activities

Transactions and events that involve the purchase and sale of long-term assets and other investments, not directly related to the entity's normal line of business.

Long-Term Note

A debt security that matures in more than one year, requiring the borrower to repay the principal and interest over an extended period.

Financing Activities

Transactions and events that affect the long-term liabilities and equity of an organization, such as issuing stocks or bonds, and repaying bank loans.