Write off and recover irrecoverable debts
Remove a debt that will not be collected, then record a later recovery separately from ordinary sales.
Cambridge IGCSE Accounting 0452 / (9–1) 0985, 2027–2029 Version 1. These lessons follow the 2027–2029 syllabus only; the separate 2026 syllabus update is not yet mapped. Written practice is self-checked, not an official Cambridge grade. Full timed-paper practice and human subject-teacher review remain pending.
Before you begin
- No previous accounting study is assumed. Keep the business, transaction and accounting period in view, and distinguish a resource, a claim and a performance result.
Work on paper. Try each question before revealing help, and explain why your method works.
Quick readiness check
What is the effect of writing off a $200 irrecoverable debt?
What you will learn
- Explain and record an irrecoverable debt
- Post write-offs and recoveries to the relevant ledger accounts
- Calculate updated trade receivables after a write-off
Write off a debt that is no longer recoverable
An irrecoverable debt is an amount due from a customer that the business does not expect to collect. Write it off by debiting Irrecoverable debts expense and crediting the customer's account or Trade receivables.
In the customer's sales-ledger account, credit the amount written off to reduce the debit receivable. In the general ledger, debit Irrecoverable debts expense and credit Trade receivables; post the same amount to the sales ledger control account where required. This reduces current-period profit and the receivable asset.
Do not record a write-off as a sales return; the goods were not returned and the original sale remains a sale.
Record a recovery when cash arrives
If a debt previously written off is later recovered, debit Bank and credit Irrecoverable debts recovered (or the designated recovery account). Post the receipt to the Bank ledger and recovery-income ledger; the receipt is not a new sale because it collects an old debt.
Use the receipt evidence to identify the original customer and amount. Follow the course account name consistently and do not restore the receivable unless the accounting procedure specifically requires it.
Pause and explain
A customer owing $260 is written off, then $100 is recovered. What is the entry for the recovery?
Worked example
A customer owing $320 is confirmed bankrupt. Give the write-off entry and revised receivables if total receivables were $7,400.
Show the worked solution
- Debit Irrecoverable debts expense $320.
- Credit Trade receivables $320.
- Updated receivables = 7,400 − 320 = $7,080.
Answer Write off Dr Irrecoverable debts $320; Cr Trade receivables $320. Receivables fall to $7,080.
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Choose Easy, Normal or Difficult. Save your answers and open worked review after finishing.
Test this topic →From guided practice to a new situation
Write your answer and reasoning first. Use a hint only if you are stuck. The model solution is for self-checking; your written work is not automatically marked.
Trade receivables are $9,200 before a $450 customer debt is confirmed irrecoverable. Record the write-off and closing receivables.
Give me a hint
Remove the debt from the asset balance and recognise an expense.
Compare my reasoning
- Dr Irrecoverable debts $450.
- Cr Trade receivables $450.
- Closing receivables = 9,200 − 450 = $8,750.
Write off $450; closing trade receivables are $8,750.
Look for these in your work
- Expense recorded
- Asset reduced
- Balance correct
A customer paid $240 of a $600 amount owed; the remaining $360 is confirmed irrecoverable. Calculate the new receivable and write-off entry.
Give me a hint
Subtract the payment first, then write off only the amount no longer expected.
Compare my reasoning
- After receipt, the amount owed is 600 − 240 = $360.
- Debit Irrecoverable debts $360.
- Credit Trade receivables $360; the customer's receivable becomes nil.
Write off $360: Dr Irrecoverable debts; Cr Trade receivables. The balance becomes nil.
Look for these in your work
- Remaining debt correct
- Write-off value correct
- Receivable cleared
A $180 debt written off last year is recovered this year. Give the entry and distinguish it from current-period sales.
Give me a hint
The cash receipt settles a previously written-off amount.
Compare my reasoning
- Debit Bank $180.
- Credit Irrecoverable debts recovered $180.
- Do not credit Sales; no new goods or services were sold.
Dr Bank $180; Cr Irrecoverable debts recovered $180. It is a recovery, not a new sale.
Look for these in your work
- Cash recorded
- Recovery account credited
- Sales kept distinct
Common mistakes
- Leaving a confirmed irrecoverable amount in receivables
- Calling a bad debt a sales return
- Recording a recovered debt as a new credit sale
What can you explain now?
A $150 debt already written off is received by bank transfer. What is credited?
Compare with the explanation
Irrecoverable debts recovered
The receipt recovers a previously written-off amount; it is not a new sale.
After trying it yourself, choose your next review. This is your self-assessment.
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Make it stick
Why is a recovered debt not recorded as a new sale?
If you needed the solution, close it and solve the problem again from a blank page. A correct answer is stronger when you can explain the reason for each step.