A Newly Created Design Business Called Smart Art Is Just

question 46

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 ageing- of- accounts method to account for Bad debts expense, and has calculated an amount of $200 as their estimate of uncollectable amounts at year- end. At the end of the year, what is the ending balance in the Allowance for doubtful debts?

• A)$1 450
• B)$800
• C)$150
• D)$200

---

Definitions:

Cognitive Ability

The capacity of an individual to perform the various mental activities most closely associated with learning and problem solving.

Volume or Mass

The volume refers to the amount of space an object occupies, while mass is a measure of an object's quantity of matter.

Piagetian Thought

A theory of cognitive development proposed by Jean Piaget, detailing how children construct a mental model of the world through stages.

Egocentrism

A cognitive trait where an individual is unable to distinguish between their own perspective and that of others.