Customer G. Smith owed Stonehollow Electronics $525. On April 27, 2018, Stonehol

Question

Customer G. Smith owed Stonehollow Electronics $525. On April 27, 2018, Stonehollow determined this account receivable to be uncollectible and wrote off the account. The company uses the direct write- off method. On July 15, 2018, Stonehollow received a check for $525 from the customer. How should the July 15, 2018 transaction be recorded? O A. July 15 Accounts Receivable G. Smith 525 Bad Debt Revenue 525 July 15 Cash 525 Accounts Receivable -G. Smith 525 B. July 15 Accounts Receivable- G. Smith 525 Bad Debt Expense 525 July 15 Cash OC. July 15 Cash D. July 15 Cash 525 Accounts Receivable G. Smith 525 525 Bad Debt Expense 525 525 Accounts Receivable G. Smith 525

Explanation / Answer

As per Direct write off method entry will be following

Cash A/c . Dr. 525

To Bad Debts Exp 525

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