Posted On: 05/02/2014 3:09:59 PM
Post# of 36729
Recovered Bad Debts
When any bad debt is recovered, two journal entries are passed. The first one reverses the write-off entry and the second one is a routine journal entry to record collection. Thus:
Accounts Receivable 70
Allowance for Doubtful Debts 70
Cash 70
Accounts Receivable 70
At the end of next accounting period, bad debts are estimated again and the balance in the allowance account is adjusted.
When any bad debt is recovered, two journal entries are passed. The first one reverses the write-off entry and the second one is a routine journal entry to record collection. Thus:
Accounts Receivable 70
Allowance for Doubtful Debts 70
Cash 70
Accounts Receivable 70
At the end of next accounting period, bad debts are estimated again and the balance in the allowance account is adjusted.
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