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Hello open tuition,
For irrecoverable debts previously written off and are unexpectedly collected, what would be 2 entries to record this? The first entry would be Debit Cash, Credit irrecoverable debts account, but I’m a little confused on what the 2nd entry would be. Is it to debit cash and credit receivables? Any help is appreciated. Thank you very much.
Joanne.
The only entry needed is Dr Cash. Cr Irrecoverable debts.
(Given that the debt had been written off it no longer exists in receivables and so there is no entry needed in receivables).
Have you watched my free lectures on this? The lectures are a complete free course for Paper FA and cover everything needed to be able to pass the exam well.
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