Chapter 10

Question 1

Provisions for Bad Debts based on Sales

Answer 1

1. Percentage of the total sales for the period
2. Percentage of on account sales for the period
3. Percentage of total net sales for the period

Question 2

Total sales for the period include cash sales and on account sales. To get the
bad debts if a certain percentage of total sales is estimated to be uncollectible,
multiply the estimated percentage by the total sales

Answer 2

Percentage of Total Sales for the Period

Question 3

If bad debt is based on account sales, multiply the percentage of bad debts
by the total amount of credit sales.

Answer 3

Percentage of on Account Sales for the Period

Question 4

Net sales are the total sales less return and allowances and discounts. To get
the bad debts if the basis is the percentage of the total net sales for the period,
multiply the percentage of bad debts by the total net sales.

Answer 4

Percentage of Total Net Sales for the period

Question 5

consists of cost of merchandise on
hand at the beginning of the accounting period,

net cost of merchandise purchased
including cost of transporting the goods bought during the period and

cost of unsold
merchandise at the end of the accounting period.

Answer 5

Cost of Goods or Cost of Sales