A Company Uses the Percent of Sales Method to Determine

question 212

Multiple Choice

A company uses the percent of sales method to determine its bad debts expense.At the end of the current year,the company's unadjusted trial balance reported the following selected amounts: All sales are made on credit.Based on past experience,the company estimates that 0.6% of net credit sales are uncollectible.What amount should be debited to Bad Debts Expense when the year-end adjusting entry is prepared?

• A)$1,275
• B)$1,775
• C)$4,500
• D)$4,800
• E)$5,500

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Definitions:

Demonstrates

To clearly show the existence or truth of something by giving proof or evidence.

Agendas

Lists or plans of items to be discussed, completed, or addressed during meetings or activities.

Discourage Changes

An approach or policy aimed at maintaining the status quo and preventing alterations or modifications.

Verbal

related to words or the process of communicating through spoken words.