When a firm collects (recovers) an account receivable that was previously written off under the allowance method of accounting for bad debts,
A. the realizable value of accounts receivable will decrease
B. the cash account will decrease by the full amount of the recovery
C. the allowance account will decrease by the amount collected
D. the realizable value of accounts receivable will increase
Answer:A
When a firm collects (recovers) an account receivable that was previously written off under the allowance method of accounting for bad debts,
A. the realizable value of accounts receivable will decrease B. the cash account will decrease by the full amount of the recovery C. the allowance account will decrease by the amount collected D. the realizable value of accounts receivable will increase