Collections of Accounts Receivable That Previously Have Been Written Off

question 134

Multiple Choice

Collections of accounts receivable that previously have been written off are credited to:

• A)A Gain account.
• B)Accounts Receivable.
• C)Bad Debt Expense.
• D)Retained Earnings.

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Definitions:

Probable Future Economic Benefits

The anticipated economic advantages expected to be received in the future as a result of owning or using an asset.

Balance Sheet

A financial statement that summarizes a company's assets, liabilities, and shareholders' equity at a specific point in time, providing a snapshot of the firm's financial condition.

Entity's Profitability

A measure of how effectively a company generates profit from its operations, often evaluated through margins and return ratios.

Common Stock Account

An equity item on the balance sheet representing funds raised by issuing common shares.