Carrington Company Uses the Allowance Method for Recording Bad Debts

question 4

Multiple Choice

Carrington Company uses the allowance method for recording bad debts.On February 1,Carrington wrote off a $3,500 customer account balance when it became clear that the particular customer would never pay.On May 29,Carrington unexpectedly received a check for $3,500 from the customer.On May 29,Carrington will:

• A)Debit Cash and credit Bad Debt Expense for $3,500;debit Accounts Receivable and credit Allowance for Doubtful Accounts for $3,500.
• B)Debit Allowance for Doubtful Accounts and credit Accounts Receivable for $3,500;debit Cash and credit Bad Debt Expense for $3,500.
• C)Debit Accounts Receivable and credit Allowance for Doubtful Accounts for $3,500;debit Cash and credit Accounts Receivable for $3,500.
• D)Debit Allowance for Doubtful Accounts and credit Bad Debt Expense for $3,500;debit Cash and credit Accounts Receivable for $3,500.

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