An amount received from a debtor whose account was previously written off as bad debt is: MCQ with Answer and Explanation

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An amount received from a debtor whose account was previously written off as bad debt is:

A. Debited to Bad Debts A/c

B. Credited to Bad Debts Recovered A/c

C. Credited to Debtor's A/c

D. Credited to Sales A/c

Answer: Option B

Solution (By JKSSB Mock Tests)

It represents a new gain and is credited to Bad Debts Recovered, a nominal account, without reopening the debtor's account.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

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Question #1

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The 'Capital Gains' from sale of long-term listed equity shares (STT paid) exceeding ₹1 lakh are taxed at:

A. Exempt

B. 20% with indexation

C. 15%

D. 10% without indexation

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Correct Answer: Option D

Explanation:
LTCG on listed equity shares/equity-oriented funds exceeding ₹1 lakh is taxed at 10% without indexation.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #2

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The Profit and Loss Appropriation Account is prepared:

A. Only in case of losses

B. After preparing Profit & Loss Account

C. Instead of Profit & Loss Account

D. Before preparing Trading Account

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Correct Answer: Option B

Explanation:
P&L Appropriation Account is prepared after the Profit & Loss Account to distribute the net profit among partners.

This question belongs to: Accountancy and Statistics Accountancy and Book Keeping

Question #3

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A: The Purchases Book records only credit purchases of goods. R: Cash purchases of goods are recorded in the Cash Book. Choose the correct option.

A. Both A and R are true and R is the correct explanation of A

B. A is true but R is false

C. Both A and R are true but R is NOT the correct explanation of A

D. A is false but R is true

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Correct Answer: Option A

Explanation:
The Purchases Book is strictly for credit purchases of trading goods. Cash purchases are recorded in the Cash Book. R correctly explains why cash purchases are excluded from the Purchases Book.

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