Sigma Reports Net Credit Sales of $400,000

question 17

Multiple Choice

Sigma reports net credit sales of $400,000.There is a credit balance of $1,000 in the Allowance for Doubtful Accounts.Uncollectible accounts are estimated to be 2.5% of net credit sales.Under the income statement approach,the adjusting entry would require a debit to Bad Debt Expense for:

• A)$10,000.
• B)$9,000.
• C)$ 9,975.
• D)some other number.

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Definitions:

Units

The fundamental quantities or measurements in which variables, goods, services, or products are expressed or quantified.

Price Floor

A legally imposed minimum price set above the equilibrium price, preventing the market price from falling below a certain level.

Demand Decreases

A situation where the quantity of a good or service that consumers are willing and able to purchase at a given price declines.

Expenditure

The action of spending funds or the amount of money spent on various items or services.