Question

Rs 2000 received from Mr X a debtor which was earlier written off as bad debt. Which account will be credited __________.

• A. Debtors a/c
• B. X a/c
• C. Miscellaneous Income a/c
• D. Contra entry

Answer 1

The correct option is C Miscellaneous Income a/c

An amount which were earlier written off in books of account as bad debts has given an adverse impact on the Profit & Loss account. Hence recovery of the same amount has to be considered as Misc. Income.