A Company Uses the Percent of Receivables Method to Determine

question 209

Multiple Choice

A company uses the percent of receivables 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 6% of receivables are uncollectible.What amount should be debited to Bad Debts Expense when the year-end adjusting entry is prepared?

• A)$22,500
• B)$23,000
• C)$22,000
• D)$4,800
• E)$5,500

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Definitions:

Cultural Symbols

Immutable elements representing the beliefs, values, traditions, and norms of a specific culture.

Organizational Culture

The common beliefs, norms, and values that shape the behavior, emotions, and thoughts of employees in a company.

Downsizing

The process of reducing the size of a company's workforce to lower costs and improve efficiency or profitability.

External Adaptation

The process through which organizations adjust and respond to changes in their external environment.