A Company Sells Computers Only Over the Internet

question 35

Multiple Choice

A company sells computers only over the internet. Customers can decide their own computer configuration at the company's website and then place the order for the computer. This is an example of:

• A) focused differentiation strategy.
• B) focused cost leadership strategy.
• C) cost leadership strategy.
• D) pull strategy.
• E) adaptive strategy.

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Definitions:

Uncollectible Accounts Receivable

Debts owed to a company that are considered to be uncollectible from the debtor, often leading to the account being written off as a bad debt expense.

Allowance for Doubtful Accounts

An estimate of the amount of accounts receivable that may not be collectible, serving as a contra account to adjust the value of total receivables.

Net Realizable Value

The estimated selling price of an asset in the ordinary course of business minus any costs associated with its sale or disposal.

Direct Write-off Method

A method for handling bad debts by writing off specific uncollectible accounts receivable when they are deemed unrecoverable, impacting the income statement.