14. Great Ducks Company uses the allowance method for bad debts. Great Ducks wro

Question

14. Great Ducks Company uses the allowance method for bad debts. Great Ducks wrote off the $500 account receivable from Sneaky Husky Inc. in March 2015. However, in September 2015 Sneaky Husky unexpectedly sent Great Ducks a check for $500 in settlement of the receivable. In recording the collection of the written-off receivable, which account is NOT part of the journal entry? A. Accounts Receivable B. Allowance for Doubtful Accounts C. Cash D. Bad Debt Expense E. all of these accounts are part of the journal entry

Explanation / Answer

journal entries made Accounting titles & Explanations Debit Credit Allowance for doubtful account 500 accounts receivable 500 (being account written off) Accounts receivable 500 allowance for doubtful accounts 500 (being account reinstated) Cash 500 Accounts receivable 500 (being cash collected) Hence option d) Bad debts expense is the answer

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