Marie Recently Bought a Stereo System That Was Promoted at an Extremely

question 126

Multiple Choice

Marie recently bought a stereo system that was promoted at an extremely low price by a national chain. However, she did not realize that the stereo came without many key components that are usually standard equipment. When she bought all of the usually standard parts, the stereo cost her more than its regular market price at other stores. She has been a victim of the ________ procedure.

• A) bait and switch
• B) foot-in-the-door
• C) lowball
• D) door-in-the-face

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Definitions:

Prepaid Expenses

Expenses paid for in advance and recorded as assets before they are used or consumed.

Acid-Test Ratio

The acid-test ratio, also known as the quick ratio, measures a company's ability to meet its short-term obligations with its most liquid assets, excluding inventory.

Marketable Securities

Financial instruments that can be easily converted into cash. They include stocks, bonds, and Treasury bills among others.

Current Liabilities

Financial responsibilities that must be settled within a period of one year.