Newton Company uses the allowance method of accounting for uncollectible accounts. On May 3, the Newton Company wrote off the $3,000 uncollectible account of its customer, P. Best. On July 10, Newton received a check for the full amount of $3,000 from Bes

The correct answer is A. When using the allowance method, a bad debt is initially recorded by debiting Bad Debts Expense and crediting Allowance for Doubtful Accounts. When a bad debt is recovered, the journal entry includes debiting Accounts Receivable - P. Best and crediting Allowance for Doubtful Accounts to reverse the write-off, and then crediting Cash and debiting Accounts Receivable - P. Best for the amount received. Option A correctly shows this process. Option B is incorrect because it only records the bad debt expense, not the recovery. Option C and Option D both overstate the accounts receivable balance by recording it twice.