Average Art Is a New Business

question 159

Essay

Average Art is a new business.During its first year of operations,credit sales were $40,000 and collections of credit sales were $36,000.One account,$650,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.Prepare the entry to record bad debts expense.

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Definitions:

Natural Substances

Organic materials found in nature that can be used for therapeutic purposes, including plants, minerals, and animal products.

Health Care Provider

A professional who offers services aimed at maintaining or improving people’s health, which can include doctors, nurses, therapists, and others.

Selective Serotonin Reuptake Inhibitor

A type of antidepressant that works by increasing levels of serotonin in the brain.

St. John's Wort

An herb commonly used for its antidepressant effects and to alleviate symptoms of anxiety and seasonal affective disorder.