Bad debts previously written off, now recovered is recorded in

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1 Points Joined September 2022
Bad debts previously written off, now recovered is recorded in
options:
a)Total Debtors account
b)Total Creditors account
c) Cash book
d)None of the above
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On 03 July 2024 at 21:44 Report
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Master in Accounts & high court Advocate
9447 Points Joined December 2011

The correct answer is (c) Cash book. When a bad debt previously written off is recovered, it is recorded as a receipt in the cash book. This is because the recovery of a bad debt is a sudden and unexpected event, and it is not related to the current sales or transactions. Here's how it would be recorded: - Debit: Cash/Bank (with the amount recovered) - Credit: Bad Debts Recovered (or a separate account for recovered debts) The other options are not correct: - (a) Total Debtors account: This account is used to record the total amount owed by customers, and is not related to the recovery of bad debts. - (b) Total Creditors account: This account is used to record the total amount owed to suppliers, and is not related to the recovery of bad debts. - (d) None of the above: This option is incorrect, as the recovery of a bad debt is indeed recorded in the cash book.

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On 08 October 2024 at 13:22
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Finance
4545 Points Joined September 2020

It is treated as revenue if deduction in write off is claimed. Only for banking and financial institutions, it is taken from provisions. 

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On 11 October 2024 at 08:04


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