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Smart Art Is a New Establishment

question 67

Essay

Smart Art is a new establishment. During the first year, there were credit sales of $40,000 and collections of credit sales of $36,000. One account for $650 was written off. The company decided to use the percent-of-sales method to account for bad debts expense, and use a factor of 2% for their year-end adjustment of bad debts expense. Prepare the entry to record the bad debt expense.


Definitions:

Open Innovation

A business model that encourages companies to use external and internal ideas and paths to market in the development of new products and services.

Open Innovation

A business model that encourages companies to use external as well as internal ideas and paths to market as they look to advance their technology.

Extrinsic Motivation

A form of motivation that comes from outside an individual, driven by rewards such as money, fame, grades, and praise.

Creativity

The ability to generate new ideas, solutions, or innovations that are both novel and useful.

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