A newly created design business, Teri's Art, is finishing its first year of operations. During the year, credit sales were $43,000 and collections of credit sales were $35,000. One account for $600 was written off. Teri's Art uses the aging-of-receivables method to account for bad debts expense. It has estimated $275 as uncollectible at year-end. What is the amount of the Bad Debts Expense for the first year of operations?
A) $7125
B) $600
C) $275
D) $875
D) $875
You might also like to view...
The least costly transaction method for the FDIC to close an insolvent bank is
A. payoff. B. purchase and assumption. C. assistance. D. foreclosure.
Services are provided for customers who are sent bills for the amount they owe. For this transaction, identify the effect on the accounting equation
a. Assets increase and liabilities increase. b. Assets increase and stockholders' equity increases. c. Liabilities increase and stockholders' equity decreases. d. Liabilities decrease and assets decrease.
When customers fall into different user groups with distinct buying preferences and practices, a product team structure is desirable
Indicate whether the statement is true or false
Which of the following methods of recording uncollectible accounts expense would be described best as a balance sheet method?
a. Accounts receivable aging method b. Percentage of net sales method c. Direct charge-off method d. Both percentage of net sales method and direct charge-off method