Bad Debts Recovered
Q: 1. Is recovery of bad debts included in the control accounts?
2. Once a debt is written off as a bad debt, when it is recovered, do we debit it in the debtors control account? Or we do not include it in the control account at all as the debt is already written off as irrecoverable?A: 1. No.
2. The journal entry for this would be:
CR Bad debts recovered (income)
So you are correct. As you can see from the debit and credit above it doesn't affect the debtor's control account at all.
By the way, I fully explain all of bad debts, bad debts recovered and provision for bad debts in the official Accounting Basics for Students book.
- Michael Celender
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