Recovered bad debt during a year will be _______ for business. • Bad
A. Capital Receipt
B. Revenue Receipt
D. Revenue expenditure
Right Answer is: B
• Bad debt is a sum of money which is not recoverable from the customers to whom goods are sold on credit. It’s an indirect loss to the firm.
• Thus, if the bad debts are recovered, it has to be credited to P & L account as revenue receipt.