What is the correct entry passed to close bad debts recovered account?

Bad debts recovered A/c Debit

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Profit or loss A/c Debit

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Cash A/c Debit

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None of these

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Solution

The correct option is A
Bad debts recovered A/c Debit

The correct entry shall be:

Bad debts Recovered A/c Dr

To Profit or loss A/c

Suggest Corrections

A. Bad Debts A/c To Consignment Debtors A/c	Dr.
B. Bad Debts A/c To Profit & Loss A/c	Dr.
C. Bad Debts A/c To Consignee A/c	Dr.
D. No entry is required to be passed