A Company Uses the Percent of Sales Method to Determine

question 93

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 0.6% of credit sales to be 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

Understand the importance and roles of planning in organizations.

Identify the differences between strategic, tactical, and operational plans.

Recognize the various types of plans and budgets used within an organization.

Understand the role of management at different levels in the planning process.

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Definitions:

Low Intensity

Describes a relatively weak level of power, brightness, or energy output, often used in the context of lights or signals.

Fault Current

The excessive electrical current that flows through a circuit during a fault condition.

Short-Circuits

Electrical connections that unintentionally direct current along an unintended path, often resulting in excessive current flow.

Ground-Faults

Ground-faults occur when an unintended path forms in an electrical circuit, allowing current to flow directly to the ground, potentially causing shocks or fires.