Answer
Where the direct write-off approach is used, the only solution is to debit Cash and credit a revenue account entitled Uncollectible Amounts Recovered.
Work Step by Step
If the allowance method is employed, then the accountant may debit Accounts Receivable and credit the Allowance for Doubtful Accounts. An entry is then made to credit the client’s account and debit Cash upon receipt of the remittance.
