Bad Debts Recovered

Financial Accounting SSS1 Third Term


Bad Debts Recovered

Performance Objectives

    1. What are Bad Debts


Sometimes, it so happens that the bad debts previously written off get recovered. When this happens, the amount so recovered is again and hence credited to the bad debt recovered account. Such recovered debts are known as Bad Debt Recovered. When bad debts are recovered from debtors after closing off a financial year, such recovered debt will be shown as income.

Bad Debt Recovered can also be defined as debt from a loan, credit line/accounts receivable which is recovered either in whole or in part after it has been written off or classified as a bad debt. Because it generally generates a loss when it is written off, a bad debt recovery usually produces income.

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