Dean Art Is a New Business

question 55

Multiple Choice

Dean Art is a new business.During its first year of operations,credit sales were $41,000 and collections of credit sales were $38,000.One account,$725,was written off.Management uses the aging-of-receivables method to account for bad debts expense and estimated $525 as uncollectible at year end.The ending balance of the Allowance for Bad Debts is ________.

• A)$505
• B)$1,230
• C)$1,250
• D)$525

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Definitions:

Recourse

The legal right to demand compensation or payment from an individual or entity in the case of an unfulfilled obligation or loss.

State-Owned Enterprise

An organization that is owned, controlled, and operated by a government entity.

Political Unrest

A state of disagreement or conflict within a country due to differing opinions on governance, policy, or leadership.

Risk Insurance

A financial product that provides a safeguard against potential losses or damages, transferring the risk from an individual or entity to an insurance provider.