BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Rupees 5000 received from Mohan whose account was written off as bad in the previous year should be credited to ____
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Mohan account
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Bad debts account
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Bad debts recovered account
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None of these
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Explanation:
Detailed explanation-1: -Recovery of bad debts written off previously will be credited to profit and loss A/c because it is an income.
Detailed explanation-2: -In the case, X’s account will be debited for rectification to cancel the entry passed and bad debts recovered account will be credited to record the correct entry.
Detailed explanation-3: -Bad Debts Written Off Meaning The Debt which cannot be recovered, and also which cannot be collected from a Debtor is the Bad Debt. The process is called writing off Bad Debt.
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