I just encountered a question where we are asked to calculate bad debts charge for the year.
One item in the question stated: “during the year, $150 of bad debts (written off three years ago) was recovered”
Now
i did not consider this in my answer as i assumed that the entry wd be:
Dr. Cash Cr. Sundry Income
As i had read that in case the recovery takes place within the current period then you do the needed reversals. If recovery happens in subsequent years, its simply treated as sundry income.