On June 16, 2018, Evergreen Inc. wrote off the $200 receivable from customer M.

Question

On June 16, 2018, Evergreen Inc. wrote off the $200 receivable from customer M. Simmons. On October 14, 2018, Evergreen unexpectedly receives $200 cash from M.Simmons. How should Evergreen record the $200 payment from M. Simmons? Evergreen uses the allowance method. O A. Debit Accounts Receivable-M. Simmons and credit Bad Debts Expense: debit Cash and credit Accounts Receivable-M. Simmons O B. Debit Cash and credit Bad Debts Expense C. Debit Cash and credit Allowance for Bad Debts 0 D. and credit Allowance for Bad Debts; debit Cash and credit Accounts Debit Accounts Receivable-M. Simmons Receivable- M. Simmons

Explanation / Answer

D.
Debit Accounts Receivables - M. Simmons and Credit Allowance for Bad Debts. Debit Cash and Credit Accounts receivable- M. Simmons.

Under the allowance method, the entry to write off a bad account is
Allowance for bad debts Debit
Accounts Receivables Credit

If any amount recovered which has been written off..
Then Follwing steps should be taken-
1. Reinstate the account that was written off.
Entry-
Accounts Receivables Debit
Allowance for bad debts Credit

Then

2. Record the cash received.
Entry-
Cash Debit
Accounts Receivables Credit

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