CIMA BA3 · Chapter 9 · Question 9 of 10
A debt of $800 that was written off as irrecoverable last year is unexpectedly received in full this year. What is the double entry to record the cash received?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Debit Bank, Credit Irrecoverable debts expense (or other income)
Explanation
The debt was removed from receivables last year, so the receipt is recognised in profit or loss by crediting the irrecoverable debts account (or a separate recoveries income account). It is not a new sale.
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