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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Bad debts previously written off, now recovered is recorded in
Replies (2)
Quick Summary
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.
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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