902 Bad Debts Recovered

Additions/Deductions

Addition to Income

Synopsis

Account 902 is established to record late payments from over-aged accounts receivable, which have been written off as a “Bad Debt”.

Debits

Credits

 

  1. Payment received on notes and accounts receivable previously charged off as uncollectible

 

Example 1

Record payment of $465 received for a bad check that had been written off in the previous year.

Journal: Cash Receipts

Entry:

 

Debit

Credit

Account 201

Cash on Hand

$465

 

Account 902

Bad Debts Recovered

 

$465