- This topic has 3 replies, 2 voices, and was last updated 9 years ago by
.
- Posts
Dear sir,
If I’m not wrong, I think the accounting entry if a company manages to recover some of the previsouly written-off receivables is :
Debit: Accounts Receivable (statement of financial positions)
Credit: Allowances for receivables (statement of financial positions)But I think it should be cash account that’s debitted, not accounts receivable, since the written off receivables have already been partially collected, which must be in the form of cash. So I don’t understand why accounts receivable are debitted. Look forward to your enlightenment.
thanks
LimingThe entry is Dr Cash; Cr Irrecoverable debts expense account.
We do not debit receivables – that would not make any sense. We credit the expense account because it is like a negative expense.
I think that when you refer to debiting receivables, you are probably referring to a question where the bookkeeper (by mistake) had Dr Cash Cr Receivables. That would be wrong and so to correct the mistake we would Dr Receivables and Cr Irrecoverable debts expense.
- You must be logged in to reply to this topic.