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Question
Jefferson uses the percent of sales method of estimating uncollectible receivables. 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.
Answer
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