When a Company Uses the Allowance Method of Accounting for Uncollectible

question 138

Multiple Choice

When a company uses the allowance method of accounting for uncollectible receivables, the entry to reinstate a previously written off account would include:

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

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Definitions:

World Trade Organization

An international organization established to supervise and liberalize world trade, dealing with the rules of trade between nations.

Global Trade

The exchange of goods, services, and capital across international borders and territories.

Trade Disputes

Conflicts that arise between countries or parties due to disagreements over trade policies, tariffs, or market access.

Imports Limit

Restrictions set by a country on the quantity or value of goods that can be imported into the country.