Jefferson Uses the Percent of Sales Method of Estimating Uncollectible

question 5

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?

• 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.

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Definitions:

Resistance to Change

Refers to the reluctance or refusal to adapt to changes in the workplace, environment, or technology.

Loss of Face

A term referring to the loss of respect, dignity, or social standing in the eyes of others, particularly in cultures that emphasize honor and reputation.

Technological Change

The overall process of invention, innovation, and diffusion of technology or processes.

Ongoing Process

A continuous cycle of activities or operations that doesn't have a fixed end point and requires regular review and adjustment.