A Company Uses the Percent of Sales Method to Determine

question 44

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

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Definitions:

Seminal Vesicles

Glands that secrete a significant portion of the fluid that becomes semen, providing nutrients and a medium for sperm after ejaculation.

Seminiferous Tubules

Narrow, coiled tubules within the testes where sperm are produced.

Spermatogenic Cells

Cells located in the testes that undergo division and differentiation to produce sperm.

Testes

The primary organs of the male reproductive system. Testes produce the hormone testosterone.