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:

Organic Product

A term used to describe substances that have been manufactured or processed without the use of synthetic chemicals, often certified by regulatory bodies.

Hydrazone Derivative

A compound resulting from the reaction of a hydrazine with a carbonyl group, typically in aldehydes or ketones, forming a double N=N bond.

Ketone

An organic compound characterized by a carbonyl group bonded to two carbon atoms.

Organic Product

A compound containing carbon atoms that has been formed as the result of a chemical reaction involving organic molecules.