A Newly Created Design Business Called Smart Art Is Just

question 126

Multiple Choice

A newly created design business called Smart Art is just finishing up its first year of operations. During the year, there were credit sales of $40 000 and collections of $36 000. One account for $650 was written off. Smart Art uses the percentage- of- sales method to account for Bad debts expense, and has decided to use a factor of 2% for their year- end adjustment of Bad debts expense. At the end of the year, what is the ending balance in Accounts receivable?

• A)$39 350
• B)$3 350
• C)$36 000
• D)$4 000

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Definitions:

Net Exports

The value of a country's total exports minus its total imports, representing the contribution of trade to the national economy.

Foreign Demand

The desire and willingness of buyers from other countries to purchase goods and services, influenced by factors such as price, quality, and exchange rates.

U.S. Exports

Goods and services produced in the United States and sold to other countries.

Dollar

A unit of currency used in various countries, most notably the United States, identified as a standard monetary unit for transactions.