Allowance for Doubtful Accounts Has a Debit Balance of $2,500

question 50

Multiple Choice

Allowance for Doubtful Accounts has a debit balance of $2,500 at the end of the year (before adjustment) , and bad debt expense is estimated at 4% of credit sales. If net credit sales are $800,000, the amount of the adjusting entry to record the estimate of the uncollectible accounts is

• A) $29,500
• B) $34,500
• C) $32,000
• D) cannot be determined

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Definitions:

Population Proportions

Population proportions represent the fraction or percentage of members in a population that possess a particular attribute.

Confidence Level

The degree of certainty or probability with which one can expect a result to fall within a specified range.

Confidence Interval

A statistical interval estimate, used to indicate the reliability of an estimate.

Population Proportions

Measures that represent the fraction of the population that possesses a particular attribute or characteristic.