Which of the Following Methods Requires Two Entries to Record

question 167

Multiple Choice

Which of the following methods requires two entries to record the recovery of accounts receivable previously written off?

• A) direct write-off
• B) allowance
• C) Two entries are never required.
• D) Both direct write-off and allowance.

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Definitions:

Annual Rate

A periodic interest rate calculated over a year, often representing the cost of borrowing money or the earnings from an investment.

Vendor's Invoice

A document from a seller to a buyer that describes the products or services sold, their quantities, and the prices agreed upon.

Net Working Capital

The variance between an organization's immediate assets and its short-term liabilities, showcasing its financial stability in the short run.

Revolving Credit

A credit line where the customer can borrow up to a set limit, pay back, and then borrow again, offering flexibility in borrowing and repayment.