Question

Amount of bad debts is deducted from:

a. Creditors b. Debtors c. Drawings d. None of these
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Answer 1

(b) deducted from Debtors.

Answer 2

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b ) Debtors.

Amount of bad debts is deducted from debtors.

Bad Debts :

Any irrecoverable portion of sundry debtors is termed as bad debts. Bad debt is a loss to the business, if it is given in the trial Balance, it should be shown on the debit side of Profit and loss account.

Further Bad debts given in the adjustment is to be deducted from sundry debtors in the Balance sheet and the same is debited to the profit and loss account.

Adjusting entry for bad debts :

Bad debts a/c Dr

To Sundry debtors a/c

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