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.