Wize University Introduction to Financial Accounting Textbook > Receivables
Recovering Written-off Accounts
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Recovering Written-off Accounts
If an account receivable that was previously written-off is collected, this is called a recovery and must be recorded using two journal entries.
Recovering an Account
- Collection of an account that was previously written-off.
- Two journal entries:
- First entry is to undo the write-off and reinstate the account (Debit Accounts receivable and Credit Allowance for doubtful accounts).
- Second entry is to record the collection (Debit Cash and Credit Accounts receivable)
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Example: Recovering Written-off Accounts
Prepare the journal entries to record the following transaction.
On September 13th, ABC Inc. received a payment of $2,000 from a customer whose account had been previously written off.
Practice: Recovering Written-off Accounts
Prepare the journal entry to record the following transaction
A customer whose account had been written off a few months earlier made a payment of $4,000.
Transactions:
| Account | Debit | Credit |
|---|---|---|