What Is the Primary Disadvantage Associated with Using Financial Incentives

question 32

Multiple Choice

What is the primary disadvantage associated with using financial incentives as a means of developing customer relationships?

• A) They take a long time to work.
• B) Customers may resist the use of financial incentives.
• C) They are highly expensive.
• D) They can be easily imitated.
• E) Customer trust is usually lacking.

---

Definitions:

Accounts Payable

An accounting entry representing an entity's obligation to pay off a short-term debt to its creditors or suppliers.

Notes Payable

A liability on a balance sheet representing promissory notes that a company must pay in the future.

Bad Debts Expense

The operating expense account that estimates the amount of credit sales that will probably not be collectible in a given accounting period when the Allowance method is used. For the direct write-off method, this account would be the actual amount written off.

Allowance for Doubtful Accounts

A contra-asset account used to estimate the portion of accounts receivable that may not be collected.