The Percentage-Of-Sales Procedure Arises from the Idea That Uncollectible Amounts

question 114

Multiple Choice

The percentage-of-sales procedure arises from the idea that uncollectible amounts will vary with the volume of credit business.The firm estimates the appropriate percentage by studying its own experience or by inquiring into the experience of similar firms.Default rates generally fall within the range of _____of credit sales.

• A).01% to .02%
• B)1% to 2%
• C)10% to 20%
• D)21% to 30%
• E)31% to 40%

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Definitions:

Flat-Topped Mesa

A broad, flat, elevated landform with steep sides, commonly found in arid and semi-arid regions.

Crater

A bowl-shaped depression or cavity on the surface of the Earth, moon, or other celestial body, typically formed by volcanic activity or meteorite impact.

Scalding Hot Ash

Extremely hot volcanic ash and gas emissions ejected during an eruption, capable of causing burns and destruction.

Ice and Snow

Frozen forms of water, with ice being a solid state and snow being a form of precipitation composed of ice crystals.