Recovery of Bad Debts Previously Written off Journal Entry

Journal Entry for Recovery of Bad Debts Previously Written Off

When a business recovers bad debts that were previously written off, it needs to reverse the write-off and record the cash received. Here is the journal entry for this transaction:

1. Reversing the Write-Off

Date	Particulars	Debit (₹)	Credit (₹)
2024-06-07	Accounts Receivable A/c	10,000
	To Bad Debts Recovered A/c		10,000
	(Being reversal of previously written-off bad debts)

2. Recording the Cash Receipt

Date	Particulars	Debit (₹)	Credit (₹)
2024-06-07	Cash/Bank A/c	10,000
	To Accounts Receivable A/c		10,000
	(Being recovery of previously written-off bad debts received in cash)

Explanation:

1. Reversing the Write-Off:

   • Accounts Receivable A/c is debited to reinstate the amount that was previously written off.
   • Bad Debts Recovered A/c is credited to recognize the recovery of the bad debts.

2. Recording the Cash Receipt:

   • Cash/Bank A/c is debited to reflect the cash inflow from the recovery.
   • Accounts Receivable A/c is credited to clear the reinstated receivable amount.