Answer:
The bad debts would be debited with $5,000.
Explanation:
The bad debts under the allowance method is calculated by either as a percentage of accounts receivables or as a percentage of sales.
Percentage of Sales method:
In the percentage of sales method the allowance is calculated as below:
Allowance for doubtful debts = Sales * Percentage for doubtful debts
Allowance for doubtful debts = $500,000 * 1% = $5,000
Now always remember that this amount will be used only and their is no need to include the allowance for doubtful accounts balance.
Whereas on the other hand, in the percentage of accounts receivable method the allowances are included in the amount calculated.
The entry would be:
Dr Bad Debt Expense $5000
Cr Allowance for Doubtful Debts $5000
Answer: Choosing one particular action for a situation
randomly
Explanation: A pure strategy is used to define the actions of the user in the particular situation. In such case, the user choose one alternatively from two or more and do not mix them.
Whereas, in a mixed strategy the user chooses its action from a number of alternatives in a random manner and not on the basis of any predetermined criteria as in the case of pure strategy.
It would be the cash register
