Smart Art Is a New Establishment

question 77

Multiple Choice

Smart Art is a new establishment.During the first year,there were credit sales of $40,000 and collections of credit sales of $35,000.One account for $650 was written off.The company decided to use the percentage of sales method to account for bad debts expense and decided to use a factor of 3% for their year-end adjustment of bad debts expense.At the end of the year,the balance of bad debts expense would be:

• A)$550
• B)$650
• C)$2250
• D)$1200

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Definitions:

Consensus

General agreement among a group or the collective opinion, judgment, or position of a majority of members within a specific context.

Frequency

In the context of statistics and research, frequency refers to the number of times an event or value occurs within a given dataset or period.

Stereotype

is a widely held but fixed and oversimplified image or idea of a particular type of person or thing.

Primacy Effect

The tendency to remember information that is presented first better than information that is presented later.