At the time of preparation of financial accounts, bad debt recovered account will be transferred to?
Correct answer: B. Profit & Loss A/c
- A. Debtors A/c
- B. Profit & Loss A/c
- C. Profit & Loss Adjustment A/c
- D. Profit & Loss Appropriation A/c
Explanation
Bad debts recovered are income because an amount previously written off as irrecoverable has been collected. The recovery account is therefore closed to the Profit and Loss Account.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? support@testustad.com
About Financial Statements
Financial statements present a business's financial performance and position through the income statement, statement of financial position, cash flow statement and changes in equity. Questions involve preparing and interpreting these statements, adjusting entries, depreciation, closing inventory, accrued and prepaid items, and distinguishing profit from cash flow.
Practise Financial Statements
128 free Financial Statements MCQs from Accounting, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Exams that ask Accounting questions like this
Accounting is on 2 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Financial Statements questions
An income statement in which each item expressed as percentage of Sale?
Short term Assets expected to be converted into cash within 1 year or less than?
Net sales equals, sales minus:
The creation of provision for doubtful debts given as an adjustment requires____________?
Which of the following is not classified as inventory in the financial statements?
Recent developments have made much of a company's inventory obsolete. This obsolete inventory should be?