Historical Art Is a New Business

question 28

Multiple Choice

Historical Art is a new business.During its first year of operations,credit sales were $55,000 and collections on credit sales were $33,000.One account of $500 was written off.Management uses the percent-of-sales method to account for bad debts expense and estimates 3% of credit sales to be uncollectible.The ending balance of Allowance for Bad Debts account is ________.

• A) $1150
• B) $1650
• C) $645
• D) $2625

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Definitions:

Employee Stock Plans

Programs established by a company to provide its employees with an opportunity to acquire shares of the company, often at a discounted price.

S-8

A registration form used by publicly-traded companies to register securities allocated for employee stock option and purchase plans.

Forms

Documents designed for recording, transmitting, or processing information according to specified requirements.

Registration

The process of recording information, specifically in context to securities, where securities must be registered before being offered to the public.