Jefferson Uses the Percent of Sales Method of Estimating Uncollectible

question 11

Multiple Choice

Jefferson uses the percent of sales method of estimating uncollectible expenses. Based on past history, 2% of credit sales are expected to be uncollectible. Sales for the current year are $5,550,000. Which of the following is correct regarding the entry to record estimated uncollectible receivables?

• A) Cash will be debited.
• B) Bad Debt Expense will be credited.
• C) Allowance for Doubtful Accounts will be credited.
• D) Accounts Receivable will be debited.

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Definitions:

Status Offense

A noncriminal act that is considered a violation of the law only because of the offender's status as a minor, such as truancy or running away from home.

Truancy

The action of staying away from school without permission, often reflecting underlying issues such as family problems or disengagement.

Suicide

The deliberate action of taking one's own life.

Status Offense

An action that is prohibited only to a certain class of people, and most often applied to behaviors forbidden to minors, such as truancy and underage drinking.