Master in Accounts & high court Advocate
9615 Points
Posted on 08 October 2024
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.