How should a recovery of previously written-off bad debts be recorded in accounting?

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Recorded as a credit entry in the Profit and Loss AccountRecorded as a debit entry in the Profit and Loss AccountSubtracted from the debtors' balance on the Balance SheetAdded to the debtors' balance on the Balance SheetNo entry is made

Explanation

When bad debts that were previously written off are later recovered, it represents a gain for the business. Therefore, the recovered amount is credited to the Profit and Loss Account as income.