An Ad Contains the Following: "Restaurant Critic, Jose Winfrey, on Mama

question 12

Multiple Choice

An ad contains the following: "Restaurant Critic, Jose Winfrey, on Mama Leone's Italian Eatery, 'Mama Leone's is simply the best. It is a surprising new entrant into the competitive Italian bistro market and it is a mighty one.'"   Jose Winfrey is the cousin of the owner of Mama Leone's and knows restaurants, but is not a critic for any publication or other media outlet. The ad:

• A) Creates a false impression.
• B) Raises no ethical questions.
• C) Is legal and ethical because it doesn't state where he is a critic.
• D) Both b and c
• E) None of the above

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Definitions:

Purchase Method

An accounting method for business combinations where the acquiring company records the assets and liabilities of the acquired company at their fair market values.

Pooling Method

An accounting technique used in mergers and acquisitions where the assets and liabilities of the merging companies are combined using their book values, rather than being re-valued or adjusted.

Market Share

The portion of a market controlled by a particular company or product, often expressed as a percentage of total sales in that market.

Spin-off

A type of corporate restructuring where a company creates a new independent company from its existing operations, assets, or divisions.