Choice "A" is correct. Accounts receivable - No effect; Allowance for uncollectible accounts - Increase. Under the allowance method, the following journal entries are recorded when an account previously written off is subsequently collected: JE #1 - To restore the account previously written off:
| Debit (Dr) | Credit (Cr) |
|---|
| Accounts receivable | $ XX | |
| Allowance for uncollectible accounts | | $ XX |
JE #2 - To record the cash collection on the account:
| Debit (Dr) | Credit (Cr) |
|---|
| Cash | $ XX | |
| Accounts receivable | | $ XX |
The debit to accounts receivable in JE#1 is offset by the credit to accounts receivable in JE #2, so there is no effect on accounts receivable. The credit to the allowance for uncollectible accounts in JE #1 increases the allowance.Choices "c", "b", and "d" are incorrect, per the above.
