Question

Customer G. Smith owed Stonehollow Electronics $ 225. On April​ 27, 2018, Stonehollow determined this account receivable to be uncollectible and wrote off the account. The company uses the direct write minus off method. On July​ 15, 2018, Stonehollow received a check for $ 225 from the customer. How should the July​ 15, 2018 transaction be​ recorded?A)July 15 Cash 225Accounts Receivable - A. Smith 225B)July 15 Accounts Receivable - A. Smith 225Bad Debt Revenue 225July 15 Cash 225Accounts Receivable - A. Smith 225C)July 15 Cash 225Bad Debt Expense 225D)July 15 Accounts Receivable - A. Smith 225Bad Debt Expense 225July 15 Cash 225Accounts Receivable - A. Smith 225

Answer 1

Answer:

D.

Explanation:

The option D is correct where the un-collectible will be reinstated as receivable from Smith and bad debt expense will be reversed then cash collection will be recorded and A/R from Smith will be reduced then.