Accounting




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General Accounting Discussions: Charge-offs and Recoveries -- Income effect?

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    • CommentAuthorrhmay
    • CommentTimeApr 8th 2008
     
    Help!

    Was wondering if recoveries are recognized as income on the profit/loss if previously charged off? If so, how are the entries made.

    Everything I read states that when I charge-off an A/R, I debit Allowance and credit A/R. When I recover a charge-off, I debit A/R and credit Allowance (reversing the original charge-off entry). I then debit cash and credit A/R.

    Logically, it would seem I need to credit other income or bad debt expense somewhere for this recovery.
    • CommentAuthormomma4_5
    • CommentTimeApr 11th 2008
     
    when you reverse the write off it is like having a clean slate again. Then you make the entry for a normal A/R payment transaction. Seems simple and it is

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