In case the Bad debt is recovered what should be the entry

Question

Accepted Answer

If bad debt is recovered, the entry should be a reversal of the original bad debt write-off entry.

Create a journal entry to reverse the original bad debt write-off entry
Debit the bad debt recovery account for the amount recovered
Credit the accounts receivable account for the same amount
If any interest or fees were charged on the bad debt, those should be credited to the income account
If the bad debt was previously written off as an expense, the reversal entry should be made to the expense account

Accepted Answer

Create a journal entry to reverse the original bad debt write-off entry.Debit the bad debt recovery account for the amount recovered

Accepted Answer

Cash/Bank A/c Dr.

To Baddebts recovered A/c

(Being bad debts recovered)

Baddebts recovered A/c Dr.

To P&L A/c

(Being bad debts recovered transferred to P&l a/c)

Accepted Answer

Cash a/c Dr.

To bad debt a/c

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