A Company Uses the Percent of Sales Method to Determine

question 85

Multiple Choice

A company uses the percent of sales method to determine its bad debts expense. At the end of the current year, the company's unadjusted trial balance reported the following selected amounts: $\begin{array}{ll}\text { Accounts receivable } & \$ 375,000 \text { debit } \\\text { Allowance for unco llectible accounts } & 500 \text { credit } \\\text { Net Sales } & 800,000 \text { credit }\end{array}$ All sales are made on credit. Based on past experience, the company estimates that 0.6% of net credit sales are uncollectible. What amount should be debited to Bad Debts Expense when the year-end adjusting entry is prepared?

• A)$5,500
• B)$1,275
• C)$1,775
• D)$4,800
• E)$4,500

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Definitions:

Repressive

Characterized by the restraint, prevention, or inhibition of expression, action, or activity, often used with regard to social, political, or personal control.

Sexual Content

Material that depicts or describes sexual acts or themes, often used in media and literature.

Men's Magazines

Publications targeted primarily at a male audience, often featuring articles on fitness, health, sports, fashion, and sometimes sexually explicit content.

Sexual Aggressors

Individuals who engage in the initiation of unwanted sexual advances or activity, often using force or taking advantage of others.