What type of bad debt is categorized as subrogatable?

• A. Insurance losses
• B. 91-day DX receivables
• C. Uncollectible accounts
• D. Fraudulent claims

Answer: (B)

Subrogatable bad debt refers to debts that an entity can recover from another party, usually because the original creditor has a right to seek reimbursement after covering a loss. In this context, 91-day DX receivables are categorized as subrogatable because they can represent a situation where the insurer has paid a claim, and now has the right to pursue recovery from the responsible party.

Insurance losses generally cannot be fully recouped because they may involve situations where the losses exceed recoverable amounts or where liability might not be clearly established. Uncollectible accounts would typically refer to debts deemed non-recoverable, which means they lack subrogation rights since there is no entity to pursue for repayment. Fraudulent claims often indicate intentional deception, which complicates recovery processes and typically are not associated with standard collection or subrogation procedures.

The nature of 91-day DX receivables as subrogatable reflects situations where the financing or insurance aspect allows for the possibility of recovery, forming the correct selection in this case.