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WAEC Financial Accounting 1995 Question 46

Question 46

Bad Debts and Provisions

What are accounting entries for bad debts recovered?

  1. A.Debit Debtor's Account, credit Bad Debts Recovered Account
  2. B.Credit Debtor's Account, debit Bad Debts Recovered Account
  3. C.Debit Debtor's Account credit Sales Account
  4. D.Credit Debtor's Account, debit Sales Account
  5. E.Credit Cash account, debit Sales Account.
Show the answer and explanation

Answer: A (Debit Debtor's Account, credit Bad Debts Recovered Account)

Explanation

The debt is first reinstated (debit debtor, credit bad debts recovered), then the cash received is recorded.