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The FindLaw Legal Dictionary -- free access to over 8260 definitions of legal terms. Search for a definition or browse our legal glossaries.

Bad Debt Recovery

bad debt recovery

An account that you "wrote-off" as not collectable, but that was later paid by the customer. When this happens, you must adjust your accounts. Your company's adjusting entries would look something like this: A debit to accounts receivable in the amount of $500 and a credit to allowance for bad debts in the amount of $500; and a debit to cash in the amount of $500 and a credit to accounts receivable in the amount of $500.
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