In case of sub-lease royalty earned by the lessor is credited to

The correct answer is D. Royalty Receivable Account.

A sublease is a lease agreement in which the lessee of an asset leases that asset to a third party. The lessor in the original lease agreement is now the sublessor, and the third party is the sublessee. The sublessor typically receives a royalty payment from the sublessee, which is recorded in the Royalty Receivable Account.

The other options are incorrect for the following reasons:

• Option A, Sub-Lease Account, is incorrect because this account is used to track the sublease agreement itself, not the royalty payments received under the agreement.
• Option B, Profit and Loss Account, is incorrect because this account is used to record all income and expenses for the period, not just royalty payments.
• Option C, Short Working Account, is incorrect because this account is used to track temporary cash flows, not royalty payments.