Bad debts recovered

Shivani (Learner) (1881 Points)

17 April 2015  

Dear Members

 

 

Goods sold to X for Rs. 30000 in FY 14-15.

 

 

X makes payment of Rs. 20000 in final settlement of his account resulting in bad debts of Rs. 10000.

 

 

These bad debts were written off in FY 14-15.

 

 

But now before the completion of FY 14-15, X comes to us and pays Rs. 10000 which earlier he said he could pay and which we booked as bad debts.

 

 

Now my question is what entry to pass when he repays his Rs. 10000 which we passed as bad debts.

 

 

I DONT feel following entry  would be right.

 

 

Bank   10000

 

To Bad debts recovered 10000

 

 

Reason i feel it wont be right is because we are still in the same financial year.

 

 

Should we wait for year to finish before we book bad debts into our books.

 

 

I mean even if X said he couldnt pay, we wait for end of year to book bad debts in our books.

 

 

Regards