New bad debt is deducted from ______.

Old bad debts account

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Creditors account

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Debtors account

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Profit & loss account

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Solution

The correct option is C Debtors account
Bad debts refer to the amount that the firm has not been able to realize from its debtors. It is regarded as a loss and is termed as bad debt. The entry for recording bad debts is:
Bad Debts A/c Dr.
To Debtors A/c
If the amount of bad debts is given outside the trial balance, by way of adjustment, such bad debts are known as further bad debts. It means the amount of sundry debtors in the trial balance is prior to the amount of bad debts and given as an adjustment. New bad debts are deducted from debtors account.

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Similar questions

Q. Prepare the bad debts account, provision for bad debts account, profit and loss account and balance sheet from the followii information as on December, 31, 2011.
(Rs.)
Debtors 80,000
Bad Debts 2,000
Provision for bad debts 5,000
Adjustments
Bad debts Rs. 500, Provision on debtors @ 3%.

The following information is extracted from the Trial Balance of M/s Nisha Traders on 31 March 2017.

Sundry Debtors	80,500
Bad Debts	1,000
Provision for Bad Debts	5,000

Additional Information

Bad Debts Rs 500

Provision is to be maintained at 2% of Debtors

Prepare bad debts account, Provision for bad debts account and profit and loss account.

Prepare the bad debts account, provision for bad debts account, profit and loss account and balance sheet from the following information as on December 31, 2011.

Rs.

Debtors 80,000

Bad Debtors 2,000

Provision for bad debts 5,000

Adjustments:

Bad debts Rs. 500, Provision on debtors @ 3%.

Q. Question: The following information is extracted from the Trial Balance of M/s Nisha traders on 31 December 2005.

Sundry Debtors	$80, 500$
Bad debts	$1, 000$
Provision for bad debts	$5, 000$
Additional Information
Bad Debts	Rs $500$

Provision is to be maintained at

2 %

of Debtors.
Prepare Bad debts account, Provision for bad debts account and Profit and Loss account.

The following information are extract from the trial balance of M/s Nisha traders on 31 December, 2005.

$\begin{matrix} Sundry Debtors & 80, 500 Bad debts & 1, 000 Provision for bad debts & 5, 000 Additional Information Bad Debts & Rs. 500 \end{matrix}$

Provision is to be maintained at 2 % of Debtors.

Prepare bad debts account, Provision for bad debts account and Profit and Loss account.

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