Bad debts recovered is:
Correct answer: D. Credited to P&L A/c
- A. Added to debtors in Balance Sheet
- B. Debited to P&L A/c
- C. Reduced from debtors in Balance Sheet
- D. Credited to P&L A/c
Explanation
Bad debts recovered are a recovery of an amount previously written off, so they are treated as income and credited to Profit and Loss Account. They are not added back to the debtors balance because the original receivable was already removed.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? [email protected]
About Accounting Principles
Accounting principles explain the rules used to record, classify and report business transactions. Coverage includes the accounting equation, double-entry system, accrual and cash bases, matching and prudence concepts, consistency, going concern, business entity, and the difference between capital and revenue items.
Practise Accounting Principles
351 free Accounting Principles MCQs from Accounting, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Discussion
Stuck on an option, or know a faster way to get there? Ask or explain it here.
No comments yet. Be the first to explain this one.
Exams that ask Accounting questions like this
Accounting is on 3 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 Accounting Principles questions
Which of the following entries is correct in respect of reserve for discounts on accounts payable?
Sundry debtors as per Trial Balance is 43,000 which includes 2,200 due from ‗H in respect of goods sent to him on approval basis, the cost price of which is 1,800. Rectification would involve:
Goods in stock worth 800 are destroyed by fire and the Insurance Co. is accepted the claim for 600. Adjustment would involve
A club paid subscription fees of `1,400. Out of which ` 200 is prepaid. In such case
Which of the following form of business organization is least regulated?
Average Accounting Return is a measure of accounting profit relative to: