The correct answer is: A. Charged to general Profit and Loss Account.
Bad debts are debts that are considered uncollectible and are written off as a loss. They are charged to the general Profit and Loss Account, which is a financial statement that summarizes a company’s revenues, expenses, and net income for a specific period of time.
Option B is incorrect because bad debts should not be divided equally amongst the departments. This is because each department may have different levels of risk and exposure to bad debts.
Option C is incorrect because bad debts should not be divided on the basis of debtors. This is because each debtor may have different creditworthiness and the likelihood of repayment.
Option D is incorrect because bad debts should not be divided on the basis of credit sales. This is because each credit sale may have different terms and conditions, which may affect the likelihood of repayment.