The Following Information Is from the 2015 Records of Armand

question 15

Multiple Choice

The following information is from the 2015 records of Armand Camera Shop: Bad debts expense is estimated by the percent-of-sales method. The management estimates that 3% of net credit sales will be uncollectible. Calculate the amount of bad debts expense for 2015.

• A)$5,250
• B)$3,450
• C)$2,250
• D)$2,850

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Definitions:

Substantial Performance

A level of performance of a contract deemed acceptable even if it does not comply with all terms, due to substantial compliance with the contract.

Conditions Precedent

Specific conditions outlined in a contract that must be met before a party is required to fulfill their part of the agreement.

Conditions Subsequent

Contractual clauses that stipulate certain events or actions must occur or fail to occur, which will terminate an existing obligation or contract.

Nominal Conditions

Conditions in name only, having little to no impact on the terms or outcome of a contract or agreement.