New bad debts are added to ______.

Creditor account

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Debtors account

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Bad debts account

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

Cash account

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Open in App

Solution

The correct option is D Bad debts account
Bad debts refer to the amount that the firm has not been able to realize from the 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
Items appearing in the trial balance are transferred to Trading account or Profit and Loss account or the balance sheet. New bad debts are added to bad debts account.

Suggest Corrections

Similar questions

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.

Join BYJU'S Learning Program