Beta Corporation wrote off $100,000 due from a specific client in March 2011. However, this client was able to make a Partial pa

Question

3 years ago

12

Beta Corporation wrote off $100,000 due from a specific client in March 2011. However, this client was able to make a Partial pa

yment of $40,000 in June 2011. Recording this cash collection will involve all of the following accounts except:_________.
A. Bad Debt Expense
B. Accounts Receivable
C. Cash
D. Allowance for Uncollectible Accounts

Business

1 answer:

Otrada [13] · Answer 1 · 2022-01-28T16:37:45+03:00

Answer:

Option D Allowance for noncollectable Accounts.

Explanation:

The bad debt recovery recording is a two step process.

Step 1 Reverse the entry of bad debt with the amount received

Dr Trade Receivable $40,000

Cr Bad debts $40,000

Step 2 Now record the receipt of amount as a reduction in trade receivable and increase in cash asset.

Dr Cash $40,000

Cr Trade Receivables $40,000

The only account unconsidered here was Allowance for the noncollectable account.