Nichols Company uses the percentage of receivables method for recording bad debts expense.The accounts receivable balance is $250,000 and credit sales are $1,000,000.Management estimates that 4% of accounts receivable will be uncollectible.What adjusting entry will Nichols Company make if the Allowance for Doubtful Accounts has a credit balance of $2,500 before adjustment? 
Definitions:
Significant Figures
The number of meaningful digits used to express a value accurately in measurements and calculations.
Accuracy
The degree to which the result of a measurement, calculation, or specification conforms to the correct value or a standard.
Precision
The degree to which repeated measurements under unchanged conditions show the same results.
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