At December 31, 2017, Sorrento Inc. estimated bad debts as 3% of the outstanding balance of Accounts Receivable. At December 31, 2018, Sorrento determined that it should increase its estimate to 6.5%. This change is handled on a:

Prospective basis.

Explanation:

It has been given that the estimated bed debts are 3% in the year 2017 while in the year 2018, this bed debt will increase to 6.5%.  

Changes in regular estimates are part of a continuous improvement process. In many processes retrospective adjustment is interdicted.

Companies can record potential changes in estimates every year.

answer; the correct answer to the above statement is (true);

explanation: doctrine of respondeat superior is a legal doctrine that is commonly used in tort. this principle makes an employer or principal legally responsible for the wrongful acts done by an employee or agent, if such acts occur within the scope of the employment or agency.