Which Statement Is Not True in Relation to Bad Debts

question 8

Multiple Choice

Which statement is not true in relation to bad debts recovered?

• A) The accounts receivable should be re-established to maintain a complete history of the customer's activity and restore their credit rating.
• B) The recovery is recorded by effectively reversing the entry originally made to write off the receivable.
• C) The entry to reinstate the accounts receivable is DR Accounts receivable and CR Bad debts recovered.
• D) The entry made following reinstatement of the account receivable to record the recovery is DR Bad debts recovered and CR Accounts receivable.

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Definitions:

Oceanic Islands

Islands that are formed by volcanic activity in the ocean and are not located on continental shelves, often featuring unique ecosystems.

Partially Melted Rock

Rock that has undergone partial melting, often found in the Earth's mantle, leading to magmatic differentiation and volcanic activity.

Earth's Mantle

The part of the earth's interior between the crust and the outer core, composed of silicate rocks that are rich in magnesium and iron.

Lithosphere

The outermost layer of Earth, comprising the crust and the upper mantle, characterized by its solid and rigid properties.