A Newly Created Design Business Called Smart Art Is Just

question 74

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 percent-of-sales method to account for uncollectible account expense,and has decided to use a factor of 2% for their year-end adjustment of uncollectible account expense.
-At the end of the year,what is the balance in Uncollectible account expense?

• A) $150
• B) $800
• C) $250
• D) $1,450

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Definitions:

Denial

A psychological defense mechanism where a person refuses to accept the reality of a factual or emotional truth.

Coercive Power

A form of power that is based on the ability to deliver punishments or impose penalties for noncompliance, often used to control or influence others' actions.

Compliance

The act of adhering to rules, standards, or laws.

Punishment

The imposition of a penalty as a consequence of an undesirable behavior, aimed at reducing or eliminating that behavior.