Why this is mistaken
Tie recovery cash to the prior claim and follow the controlled reinstatement or allowance path. Collection is not new customer performance.
Where to watch
When this mistake may appear
- Cash came in this period.
- The account was gone, so this is income.
Check your work
Your work may contain this mistake if:
- Credits revenue at recovery.
- Cannot identify original customer and writeoff.
- Omits allowance or reinstatement path.