Bad Debts Recovered

A firm may be able to recover a debt that was previously written off. The following entries will be made if this happens:

  1. Debit – Debtors
    Credit – credit bad debts recovered account – to restore the bad debt recoverable.
    N/B: This should be the amount to be recovered.
  2. Debit – Cashbook
    Credit – Debtors with the cash received.
  3. Debit – bad debts recovered account.
    Credit – P & L account with the same balance as bad debts account.

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