At the time of preparation of financial accounts, bad debt recovered account will be transferred to
A)Debtors A/c
B)Profit & Loss A/c
C)Profit & Loss Adjustment A/c
D)Profit & Loss Appropriation A/c

Question

Quizplus · Accepted Answer

Bad debt recovered is considered as an income for the business because it represents an amount that was previously written off as uncollectible but has now been received. Therefore, it is credited to the Profit & Loss Account as it increases the net income of the business.

At the Time of Preparation of Financial Accounts, Bad Debt