In accounting, how do we treat Bad debts written off in one accounting period and subsequently paid in a later accounting period?

January 31st, 2011 Comments off
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Sometimes, a bad debt which has already been written off might be unexpectedly paid by the delinquent debtor.  If the bad debt is written off as bad in one accounting period and is subsequently paid in a later accounting period:

  • The amount paid should be recorded as ADDITIONAL INCOME in the Income statement of the period in which the payment is received.

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Financial Accounting

 
 

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