bad debt recovery

Dictionary of Accounting Terms for: bad debt recovery
bad debt recovery

account receivable previously written off as uncollectible is now collected. The entry is to reverse the original write-off by debiting accounts receivable and crediting allowance for bad debts. A second entry is required for the collection by debiting cash and crediting accounts receivable. A high ratio of recoveries to write-offs may signify to the analyst that the firm writes off uncollected debts too quickly.

Dictionary of Banking Terms for: bad debt recovery
bad debt recovery

collection of loans written off as uncollectible and charged to the lender’s loan loss reserves account. Recoveries may come from several sources: the borrower’s voluntary payment of some or all of the principal or interest payments due; foreclosure and sale of the borrower’s assets pledged as loan collateral; or garnishment of the borrower’s wages, salary, or bank assets.

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