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

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Definitions:

Project Quality

The degree to which a project meets the requirements, standards, and objectives laid out for it.

Forward Pass

A process that identifies all the early start and early finish times.

Backward Pass

A process that identifies all the late start and late finish times.

Critical Path

In project management, the sequence of stages determining the minimum time to complete a project.