Using the Percentage of Receivables Method for Recording Bad Debts

question 102

Multiple Choice

Using the percentage of receivables method for recording bad debts expense, estimated uncollectible accounts are ¥250,000. If the balance of the Allowance for Doubtful Accounts is ¥50,000 credit before adjustment, what is the amount of bad debts expense for that period?

• A) ¥250,000
• B) ¥200,000
• C) ¥300,000
• D) ¥50,000

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Definitions:

Probability

The likelihood of an event happening, measured on a scale from 0 (impossibility) to 1 (certainty).

System

An organized set of interrelated elements or components that systematically work together to achieve a specific goal or objective.

Empty

A state or condition where no elements, members, or items are present, often used in data contexts to describe a lack of values.

Average Arrival Rate

Measures the average rate at which entities (such as customers, calls, or vehicles) arrive into a system or facility over a specified period.