wiz-icon
MyQuestionIcon
MyQuestionIcon
2
You visited us 2 times! Enjoying our articles? Unlock Full Access!
Question

A bad debt recovered during the year is a __________.

A
capital expenditure
No worries! We‘ve got your back. Try BYJU‘S free classes today!
B
revenue expenditure
No worries! We‘ve got your back. Try BYJU‘S free classes today!
C
capital receipt or gain
No worries! We‘ve got your back. Try BYJU‘S free classes today!
D
revenue receipt
Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses
Open in App
Solution

The correct option is D revenue receipt
Bad debt is an amount which is not recoverable from the customers to whom goods are sold on credit. Its an indirect loss to the firm and is debited to profit and loss account by crediting the respective ledger account of sundry debtors.

Later on, if the bad debts are recovered, it has to be credited to profit & loss account as revenue receipt.

flag
Suggest Corrections
thumbs-up
0
Join BYJU'S Learning Program
similar_icon
Related Videos
thumbnail
lock
Journal, Ledger and Posting From Journal
ACCOUNTANCY
Watch in App
Join BYJU'S Learning Program
CrossIcon