Question

A company collects an account receivable previously written off. Indicate how this transaction would affect:______.a. assets, stockholders' equity, and revenues. b. increase, increase, increase. c. increase, increase, decrease.d. increase, decrease, increase. e. no effect.

Answer 1

Answer:

b. increase, increase, increase

Explanation:

When an amount previously written off is collected, the entries required to account for the collection are

Debit cash account

Credit other income account.

This will increase asset (in form of cash), increase stockholders' equity (in form of net income) and increase revenue.