Question 27 2 pts When using the allowance method, after a company has previousl

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Question 27 2 pts When using the allowance method, after a company has previously written off an account O the company does not need to re-establish the receivable account. O when a customer pays on an account that has been written off, the company needs to reverse the write-off to the allowance for Bad Debt account and then record the receipt of cash. O the company continues to send monthly statements to the customers whose accounts have been written off O the company cannot collect from these customers becasue their accounts have been written off

Explanation / Answer

Solution:

When using the allowance method, after a company has previously written off an account; "When a customer pays on an account that has been written off, the company needs to reverse the writeoff to the Allowance for Bad Debts account and then record the receipt of cash"

Hence 2nd option is the right choice.

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