What are Bad Debts Recovered

Sometimes, it so happens that the bad   debts previously written off get recovered. When this happens, the amount so recovered is a gain 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 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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