The following selected amounts are reported on the year-end unadjusted trial balance report for a company that uses the percent of sales method to determine its bad debts expense.           Accounts receivable $ 435,000 Debit Allowance for Doubtful Accounts   1,250 Debit Net Sales   2,100,000 Credit All sales are made on credit. Based on past experience, the company estimates 1% of credit sales to be uncollectible. What adjusting entry should the company make at the end of the current year to record its estimated bad debts expense?  

Under the net method, when a company uses a perpetual inventory system, an invoice for $2,000 with terms of 2/10, n/30 should be recorded with a debit to Merchandise Inventory and a credit to Accounts Payable of $2,000.

Pepperdine reported net sales of $8,600 million, net income of $126 million and average accounts receivable of $890 million. Its accounts receivable turnover is:

Sales Discounts is added to the Sales account when computing a company’s net sales.

A receivable is an amount due from another party.

Technologically advanced accounting systems rarely need monitoring for errors because computers always process transactions correctly.

A promissory note is a written promise to pay a specified amount of money either on demand or at a definite future date.

The expense recognition (matching) principle permits the use of the direct write-off method of accounting for uncollectible accounts when bad debts are very large in relation to a company’s other financial statement items such as sales and net income.

The notes receivable account of a business should include both the notes that have not yet matured and the dishonored notes.

Sales of $350,000 and net sales of $323,000 could reflect sales discounts of $27,000.