17. Sellers allow customers to use credit cards for all of the following reasons except A) To be able to charge more due to fees and interest B) To lessen the risk of extending credit to customers who cannot pay. C) To speed up receipt of cash from the credit sale D) To increase total sales volurme. E) To avoid having to evaluate a customer's credit standing for each sale. The interest accrued on $7,500 at 6% for 90 days is: (Use 360 days a year.) 18. A) $450.00. B-S37.50. 6112.50. $11.25. $1,800.00. 19. Factoring receivables is beneficial to a seller for all of the following reasons except: A) Allows firms to receive cash earlier. B) Passes ownership of the receivables to the factor. C) There are no fees for factoring D) Seiler avoids the cost of billing and accounting for recoivables E) May transfer the risk of bad debts to the factor. 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: 20. debit debit credit 375,000 500 800,000 Accounts receivable Allowance for uncollectible accounts Net Sales All sales are made on credit. Based on past experience, the company estimates that 0.6% of net credit sales are 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 A company has $90,000 in outstanding accounts receivable and it uses the allowance method to account for uncollectible accounts. Experience suggests that 4% of outstanding receivables are uncollectible. The current balance (before adjustments) in the allowance for doubtful accounts is an $800 credit. The journal entry to record the adjustment to the allowance account includes a debit to Bad Debts Expense for: AJ $2,800 B) $3,568 C) $3,632 D) $3,600 E) $4,400