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Bad Debts Recovered after 3 years

Forums › FIA Forums › Bad Debts Recovered after 3 years

  • This topic has 3 replies, 2 voices, and was last updated 11 years ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • April 17, 2014 at 8:08 pm #165561
    mansoor
    Participant
    • Topics: 423
    • Replies: 541
    • ☆☆☆☆

    Helllo.

    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.

    What do i do in a question such as this??

    April 18, 2014 at 6:20 am #165572
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54796
    • ☆☆☆☆☆

    The double entry is Dr cash and Cr irrecoverable debts expense.

    April 18, 2014 at 12:11 pm #165589
    mansoor
    Participant
    • Topics: 423
    • Replies: 541
    • ☆☆☆☆

    thank you Sir…

    April 18, 2014 at 12:36 pm #165592
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54796
    • ☆☆☆☆☆

    You are welcome 🙂

  • Author
    Posts
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