Malick & Co. engaged in trading activity could not recover ₹ 5 lakhs from a customer. It claimed the entire amount as bad debt by writing off in the books of account. The aggregate sale made during the year to the party amounts to ₹ 30 lakhs. The amount eligible for deduction by way of bad debt is –
A. Nil
B. ₹ 3 lakhs
C. ₹ 5 lakhs
D. ₹ 60,000
Answer:C
Malick & Co. engaged in trading activity could not recover ₹ 5 lakhs from a customer. It claimed the entire amount as bad debt by writing off in the books of account. The aggregate sale made during the year to the party amounts to ₹ 30 lakhs. The amount eligible for deduction by way of bad debt is –
A. Nil B. ₹ 3 lakhs C. ₹ 5 lakhs D. ₹ 60,000