JAMB - Accounts Principles Of Accounts (2025 - No. 70)
In preparing a profit and loss account, a decrease in provision for doubtful debts accounts is treated as
income
current assets
expenses
current liability
Explanation
In the profit and loss account, a decrease in provision for doubtful debts is treated as income. This happens because it means fewer bad debts are expected than previously estimated, so the difference is recorded as income.
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