At Minimum, the Price of a Product And/or Service

question 21

Multiple Choice

At minimum, the price of a product and/or service

• A) must cover the cost of bringing it to market.
• B) must demonstrate a substantial profit.
• C) must be at or below the competition.
• D) must be based exclusively on a break-even analysis.

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Definitions:

Percentage of Receivables Method

The percentage of receivables method is an accounting technique used to estimate the amount of a company's accounts receivable that will not be collected, based on past experience.

Allowance for Doubtful Accounts

An accounting concept representing the estimated uncollectible amounts from customers' outstanding accounts.

Cash Realizable Value

The amount of cash expected to be obtained from the current sale or disposal of an asset after deducting any selling costs.

Accounts Receivable

Amounts outstanding from customers to a firm for goods or services that have been supplied but remain unpaid.