Multiple choice

An amount of Rs. 6,000 due from Anshul, which had been written off as a bad debt in a previous year, was unexpectedly recovered, and had been posted to the personal account of Anshul. The rectification entry will be

  1. Anshul's a/c Dr. Rs.6,000, to suspense a/c Rs. 6,000.

  2. suspense a/c Dr. Rs. 6,000, to bad debts recovered a/c Rs. 6,000.

  3. no rectification entry required.

  4. Anshul's a/c Dr. Rs. 6,000, to bad debts recovered a/c Rs. 6,000.
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

When a bad debt written off in a previous year is recovered, and the amount is incorrectly posted to the debtor's personal account, the rectification requires reversing that incorrect entry. We debit Anshul's account (to cancel the credit created by the wrong posting) and credit Bad Debts Recovered account. Option B is incorrect because Suspense Account is not needed here - we know exactly what went wrong.

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