Jefferson Uses the Percent of Sales Method of Estimating Uncollectible

question 11

Multiple Choice

Jefferson uses the percent of sales 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 regarding the entry to record estimated uncollectible receivables?

• A) Cash will be debited.
• B) Bad Debt Expense will be credited.
• C) Allowance for Doubtful Accounts will be credited.
• D) Accounts Receivable will be debited.

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Definitions:

Lotteries

Games of chance where winners are selected by drawing lots, often used as a means of raising funds.

Stratified Random Sampling

A sampling technique that divides the population into distinct subgroups, or strata, and randomly selects samples from each stratum.

Standard Error

A measure of the variability or dispersion of a sample statistic, such as the sample mean, from the population mean.

Sampling Frame

The master list from which a sample is selected.