The Following Information Is from the 2017 Records of Armand

question 45

Multiple Choice

The following information is from the 2017 records of Armand Music Shop:

Bad debts expense is estimated by the percent-of-sales method.Management estimates that 6% of net credit sales will be uncollectible.Calculate the amount of bad debts expense for 2017.

• A)$10,680
• B)$8,100
• C)$12,180
• D)$9,180

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Definitions:

Alternative Proposed Use

A potential use of resources or assets under consideration as an option different from their current application.

Cash

Money in the form of bills or coins, used as a medium of exchange; in accounting, it often refers to assets that are readily available for use.

Opportunity Cost

The cost of forgoing the next best alternative when making a decision.

Alternative Use

Alternative use pertains to the different ways in which an asset or resource can be utilized apart from its current or primary purpose.