Answered: 1. From the time that discount stores…

1. From the time that discount stores opened, consumers "voted" for lower prices above personal service. A) True B) False

College Accounting, Chapters 1-27

23rd Edition

ISBN:9781337794756

Author:HEINTZ, James A.

Publisher:HEINTZ, James A.

Chapter11: Accounting For Purchases And Cash Payments

Section: Chapter Questions

Problem 3TF: A trade discount is a reduction from the list or catalog price offered to different classes of...

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Concept explainers

Pricing

Pricing is used as a term in finance and economics, pricing is the process of fixing a value for a product or a service. Pricing establishes a value for a product or service that the customer has to pay. A business can choose from different strategies while deciding to set prices.

Question

1. From the time that discount stores opened, consumers "voted" for lower prices above
personal service.
A) True
B) False

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In "Retail: Discounters Get Their Day”, Business Week, January 14, 2002, the authors suggest that consumers will try to stretch their dollars. So discounters and value-oriented retailers such as Wal-Mart Stores Inc. and Target Stores will continue to take market share away from mall-based department stores and specialty stores. The authors also suggest retailers will have “to keep an eye on inventory and other expenses." How could an excessive build-up of inventory hurt a retailer’s bottom line?
1. From pages 5-1 and 5-2 of the VLN, which statement is FALSE as it relates to a trade discount? Group of answer choices A. It is a concept. B. The company provides a good or service at a reduced price. C. A contra revenue is recognized at the time of sale. D. It causes the sale to be recognized at the reduced, agreed upon price. 2. From pages 5-1 and 5-2 of the VLN, which of the following is FALSE as it relates to a sales discount? Group of answer choices A. It is an incentive to credit customers (customers who purchased on account) to encourage them to pay their invoice early. B. It is always recorded at the time of the sale. C. It is a contra revenue. D. It only applies to credit customers (customers who purchased on account). 3. From page 5-2 of the VLN, which of the following accounts are subtracted from sales to compute Net sales? Allowance for uncollectible accounts Deferred revenue Sales discounts Sales returns and allowances Accumulated depreciation Trade discount…
1. From pages 5-1 and 5-2 of the VLN, which statement is FALSE as it relates to a trade discount? Group of answer choices A. It is a concept. B. The company provides a good or service at a reduced price. C. A contra revenue is recognized at the time of sale. D. It causes the sale to be recognized at the reduced, agreed upon price.
Which of the following statements is not correct? Multiple Choice Price discrimination is the practice of selling identical goods or services to different customers at different prices. Peak-load pricing is the practice of setting prices highest when the quantity demanded for the product approaches the physical capacity to produce it. Price fixing is a particular legal and ethical problem because it is not universally illegal. Dumping is the practice of setting the selling price of a product at a low price with the intent of driving competitors out of the market or creating a barrier to entry for new competitors.
When purchase prices are rising, which of the following statements is true? a.LIFO produces a higher cost of goods sold than FIFO. b.LIFO produces a higher cost for ending inventory than FIFO. c.FIFO produces a lower amount for net income than LIFO. d.Weighted average cost produces a higher net income than FIFO or LIFO.
When a company decides to sell its goods on credit, it should evaluate the effect on profit of Additional revenues Additional expenses a. Yes Yes b. Yes No c. No Yes d. No No
Nova Electronics found that a computer part was listed at the same suggested retail price in catalogues from two different manufacturers. However, the first catalogue offered discounts of 22% and 8% while the second offered discounts of 16%, 6% and 4%. Which is the better offer? By what percent less?
Payments to a customer for slotting fees: a. can never be recognized. b. must be expensed immediately. c. might be considered a reduction in the selling price of goods sold to the customer. d. are always expensed over the period benefited for the right to shelf space.
The company manager (retail industry) stated that the company could lower its operating leverage by renting its stores rather than buying. Would you recommend this? Explain.
Which of the following would not result in a reduction of the amount invoiced to a customer when a credit sale is made? A. Quantity discount B. Cash-free discount C. Sales discountD. Two-for-one special
Which is CORRECT about information asymmetry and adverse selection Information asymmetry refers to the situation when buyers have more information on the product than the sellers. Information asymmetry is the result of adverse selection. In a used car market, if sellers with good cars are unwilling to sell at a large discount, then only bad cars will get sold. This suboptimal outcome is so-called “adverse selection”. Due to information asymmetry, market investors interpret firm’s SEO announcement positively because they believe insiders consider the firm undervalued.
If costs are rising, which of the following will be true?a. The cost of goods sold will be greater if LIFO is usedrather than weighted average.b. The cost of ending inventory will be greater if FIFO isused rather than LIFO.c. The gross profit will be greater if FIFO is used ratherthan LIFO.d. All of the above are true