Shelly Works in the Electronics Unit of Ash Computers

question 105

Multiple Choice

Shelly works in the electronics unit of Ash Computers. She receives a request from Mandy, who works in the monitor display unit of Ash Computers, for a pallet of electronic switches. Based on what you know about market controls, what should Shelly do when giving the pallet of switches to Mandy?

• A)Shelly should give them to Mandy free since they work for the same company.
• B)Shelly should sell them to Mandy at double the market price to increase the company's profit on paper.
• C)Shelly should price them the same as what Mandy would have to pay for them in the marketplace.
• D)Shelly should give them to Mandy for half price since they are colleagues.
• E)Shelly should give them to Mandy for free but record the transaction as if she had charged full market price.

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Definitions:

Credit

Amount entered on the right side of an account.

Notes Receivable

Financial assets representing amounts owed to a company, usually evidenced by a formal promissory note.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or within the company's operating cycle, whichever is longer.

Allowance Method

An approach in accounting that calculates expected losses from bad debts by assessing uncollectible accounts at the conclusion of each period.