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Rs. 200 received from Smith shoes account, was written off as a bad debt should be credited to : 
  • a)
    Bad Debts Recovered account
  • b)
    Smith’s account;
  • c)
    Cash account 
  • d)
    Bad debts account 
Correct answer is option 'A'. Can you explain this answer?
Most Upvoted Answer
Rs. 200 received from Smith shoes account, was written off as a bad de...
The Rs. 200 received from Smith shoes account, which was written off as a bad debt, should be credited to the "Bad Debts Recovered" account.
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Rs. 200 received from Smith shoes account, was written off as a bad de...
  • When an amount that was previously written off as bad debt is recovered, it should be credited to the Bad Debts Recovered account. This account reflects the recovery of amounts that were earlier considered irrecoverable.
  • Smith's account was already written off, so it should not be credited.
  • Cash account would be debited because the cash is received.
  • Bad debts account is used when writing off debts, not when recovering them.
Thus, the recovered amount should be credited to the Bad Debts Recovered account.
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Rs. 200 received from Smith shoes account, was written off as a bad debt should be credited to :a)Bad Debts Recovered accountb)Smith’s account;c)Cash accountd)Bad debts accountCorrect answer is option 'A'. Can you explain this answer?
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