Activity 25.5 Why do you think we reinstate the debt just to cancel it out again? Why don't we simply debit the bank account and credit the bad debts recovered account? Activity 25.6 Which one of the following would result from a decrease in the provision for doubtful debts? (a) An increase in gross profit (b) A reduction in gross profit (c) An increase in net profit (d) A reduction in net profit