Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 31 - No. 16)
A company uses the percentage of sales method to estimate bad debts. If sales are $1,000,000 and the estimated percentage is 2%, what is the amount of the bad debt expense?
$2,000
$20,000
$50,000
$1,000,000
Explanation
The bad debt expense is calculated by multiplying sales by the percentage.
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