National Art Is a New Business

question 168

Multiple Choice

National Art is a new business.During its first year of operations,credit sales were $40,000 and collections were credit sales of $31,000.One account,$525 was written off.Management uses the percent-of-sales method to account for bad debts expense and estimates 2% of credit sales to be uncollectible.The ending balance of Allowance for Bad Debts account is ________.

• A)$275
• B)$800
• C)$170
• D)$1,410

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Definitions:

Monthly Profit

The net income achieved by a business over the course of a single calendar month after all expenses have been deducted from total revenue.

Self-Propelled

Refers to machines or vehicles that are equipped with their own means of propulsion, allowing them to move without external assistance.

Horsepower Rating

A measure of the power output of an engine, equivalent to 746 watts, indicating the engine's capability to perform work.

Workmanship

The degree of skill with which a product is made or a job is done, reflecting quality and attention to detail.