MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The interest accrued on $7,500 at 6% for 90 days is: (Use 360 days a year.) A) $37.50 B) $1,800.00 C) $450.00 D) $11.25. E) $112.50 2) 2) MacKenzie Company sold $300 of merchandise to a customer who used a Regional Bank credit card. Regional Bank deducts a 1.5% service charge for sales on its credit cards and credits MacKenzie's account immediately when sales are made. The journal entry to record this sale transaction would be: A) Debit Cash of $300 and credit Accounts Receivable $300. B) Debit Cash of $300 and credit Sales S300. C) Debit Accounts Receivable $300 and credit Sales $300. D) Debit Cash $295.50; debit Credit Card Expense $4.50 and credit Sales $300. E) Debit Cash $295.50 and credit Sales $295.50. 3) The expense recognition principle, as applied to bad debts, requires: A) That bad debts be disclosed in the financial statements. B) That bad debts not be written off. C) That expenses be ignored if their effect on the financial statements is unimportant to users' business decisions. D) The use of the allowance method of accounting for bad debts. E) The use of the direct write-off method for bad debts. 4) On December 31 of the current year, the unadjusted trial balance of a company using the percent of receivables method to estimate bad debt included the following: Accounts Receivable, debit balance of $95,250; Allowance for Doubtful Accounts, credit balance of $921. What amount should be debited to Bad Debts Expense, assuming 6% of outstanding accounts receivable at the end of the current year are estimated to be uncollectible? A) 55.660. B) 4.794. C) 55,770. D) $5,715. E) $6,636. 5) 5) A company uses the percent of sales method to determine its bad debts expense. At the e the current year, the company's unadjusted trial balance reported the following selected a $ Accounts receivable Allowance for uncollectible accounts Net Sales 375,000debit 500 debit 800,000credit 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) $1,775 B) $1,275 C) $5,500 D) $4,500 E) $4,800