A Commonly Used Indirect Channel Moves Product from Producer to Retailer

question 39

Multiple Choice

A commonly used indirect channel moves product from producer to retailer to consumer. Companies like Target and The Home Depot buy directly from manufacturers rather than wholesalers. This channel is used when

• A) the retail outlets are regionally located.
• B) the cost of maintaining inventory is low.
• C) there is little if any seasonal demand.
• D) the risk lies solely with the manufacturer.
• E) the retailer is large and can buy in large quantities from a producer.

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Definitions:

Closing Entries

Journal entries made at the end of an accounting period to transfer the balances in temporary accounts to permanent accounts, thereby preparing the company's books for the next period.

Net Income

The net income of a business once all costs, taxes, and deductions are taken from the overall revenue.

Double Rule

A method used in accounting to underline totals for certain accounts or figures, indicating a sum or conclusion.

Closing Process

The series of steps performed at the end of an accounting period to prepare the books for the next period, including updating accounts and transferring balances.