A Retailer That Allowed Its Employees to Handle a Customer

question 38

Multiple Choice

A retailer that allowed its employees to handle a customer complaint without having to ask for permission or direction from management would have:

• A)obligated its employees to help customers
• B)ignored the rights of its customers
• C)empowered its employees to help customers
• D)created an ethical dilemma
• E)ignored the rights of its employees

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Definitions:

Off-Balance Sheet Financing

Off-balance sheet financing is the use of funding or financial activities not recorded on the company's balance sheet to keep debt ratios low.

Capitalizing A Lease

The process of recognizing a leased asset and related lease liability on the balance sheet, treating the lease as a purchase financed by a loan.

Capital Lease

A lease considered a purchase of an asset for accounting purposes, where the lessee acquires all risks and rewards associated with ownership.

Operating Lease

A leasing agreement allowing the use of an asset without ownership, typically involving payments for a shorter period than the asset's useful life.