A Company Uses the Percent of Sales Method to Determine

question 53

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:
All sales are made on credit.Based on past experience,the company estimates 0.6% of credit sales to be uncollectible.What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?

• A)Debit Bad Debts Expense $2,130; credit Allowance for Doubtful Accounts $2,130.
• B)Debit Bad Debts Expense $2,630; credit Allowance for Doubtful Accounts $2,630.
• C)Debit Bad Debts Expense $4,300; credit Allowance for Doubtful Accounts $4,300.
• D)Debit Bad Debts Expense $4,800; credit Allowance for Doubtful Accounts $4,800.
• E)Debit Bad Debts Expense $5,300; credit Allowance for Doubtful Accounts $5,300

---

Definitions:

Antiracist Appropriation

The act of adopting elements of a culture by those who actively oppose racism, with the intention of showing solidarity or respect, though it can sometimes lead to controversy over authenticity or ownership.

Kaffiyeh

A traditional Middle Eastern headdress fashioned from a square scarf, typically made of cotton, known for its symbolic significance in Arab culture.

Mainstream Hip-Hop

A genre of music that is widely popular and has significant influence in the music industry, characterized by its rhythmic and rhyming speech.

White Leisure Class

A social segment characterized by white individuals who possess the wealth and time to engage in leisure activities, historically associated with social and economic privilege.