When R.D.D is created, __________ is credited.

R.D.D A/c

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Sales A/c

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Bad debts A/c

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None of the above

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Solution

The correct option is A R.D.D A/c
R.D.D. means reserves for doubtful debts.
R.D.D. is created for the anticipated bad debts based on the historical data. The reserve is creating out of profit against which following journal entry will be passed:

Profit & Loss A/c Dr.
To Reserves for Doubtful Debts.

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Which account is credited while creating a provision for doubtful debts in the books?

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