Jefferson Uses the Percent of Method of Estimating Uncollectible Expenses

question 108

Multiple Choice

Jefferson uses the percent of method of estimating uncollectible expenses.Based on past history,2% of credit sales are expected to be uncollectible.Sales for the current year are $5,550,000.Which of the following is correct?

• A)Uncollectible accounts are estimated to be $55,500.
• B)Uncollectible accounts are estimated to be $111,000.
• C)Bad debt expense is estimated to be $5,550.
• D)Bad debt expense is estimated to be $11,100.

---

Definitions:

Confidence Interval

A statistical range, with a given probability, that takes into account uncertainty when estimating some unknown parameter of the population.

Dependent Variable

A variable in a study or model that is expected to change in response to manipulations or changes in another variable, known as the independent variable.

Proficiency Test

A test designed to measure the ability, skill, or knowledge in a particular area or field.

Prediction Interval

A range of values that is likely to include the outcome of a single new observation based on a predictive model or past data.