Bad debt recovery,
Definition of Bad debt recovery:
Because it generally generates a loss when it is written off, bad debt recovery usually produces income. In accounting, the bad debt recovery credits the allowance for bad debts or bad debt reserve categories and reduces the accounts receivable category in the books.
Bad debt recovery is a payment received for a debt that was written off and considered uncollectible. The receivable may come in the form of a loan, credit line, or any other accounts receivable.
A debt incurred from a loan, a credit line, or an accounts receivable that is recovered either in whole or in part after it had been written off or classified by the lender as a bad debt. This recovery can often actually produce income because it will typically generate a loss when it is written off by the lender.
How to use Bad debt recovery in a sentence?
- In many cases, bad debts may be written off for tax purposes.
- All or part of the bad debt may be made in the form of a payment from a bankruptcy trustee or when the bank sells collateral.
- Bad debt recovery is a payment received for a debt that was written off and considered uncollectible.
- Bad debts must be reported to the IRS as a loss. Bad debt recovery must be claimed as part of its gross income.
Meaning of Bad debt recovery & Bad debt recovery Definition