When an Account Receivable That Has Previously Been Written Off

question 26

Multiple Choice

When an account receivable that has previously been written off is later paid, under the allowance method the correct accounting is to

• A) Dr. A/R Cr. Allowance for Doubtful Accounts
• Dr) Cash
• Cr) A/R
• B) Dr. Cash Cr. A/R
• Dr) A/R
• Cr) Allowance for Doubtful Accounts
• C) Dr. Cash Cr. A/R
• D) Dr. A/R Cr. Allowance for Doubtful Accounts

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Definitions:

Shareholders Consent

The approval or agreement of shareholders, often required for significant corporate actions.

Self-Dealing

occurs when a person in a fiduciary position acts for their own benefit rather than for the benefit of the beneficiaries.

Prudent Business Judgment

Refers to making careful and sensible business decisions based on a thorough evaluation of risks and benefits.

Consumer-Protection Statutes

Laws designed to safeguard buyers of goods and services, and the public, from unfair practices in the marketplace.