Your Company Wrote Off $350 in Accounts Receivable Two Months

question 8

Multiple Choice

Your company wrote off $350 in accounts receivable two months ago when a customer went bankrupt.That customer reorganizes and now pays the $350.Your company should:

• A)debit Bad Debt Expense and credit Cash.
• B)debit Accounts Receivable and credit Bad Debt Expense and then debit Allowance for Doubtful Accounts and credit Cash.
• C)debit Cash and credit Bad Debt Expense.
• D)debit Accounts Receivable and credit Allowance for Doubtful Accounts and then debit Cash and credit Accounts Receivable.

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Definitions:

Petty Cash Overage

A situation where the amount of petty cash on hand is more than the recorded amount, indicating discrepancies in transactions or recording errors.

Auxiliary Petty Cash Record

A supplementary accounting register used to track small or incidental expenses paid out in cash, aiding the main petty cash system.

Petty Cash Voucher

A petty cash form to be completed when money is taken out of petty cash.

Petty Cash Account

A modest sum of money maintained for covering small or unexpected costs.