Movie Studios Use Market Research to Reduce Their Risk of Losses

question 220

Multiple Choice

Movie studios use market research to reduce their risk of losses by hiring firms such as the National Research Group to conduct test screenings and tracking studies. Often, 300 to 400 prospective moviegoers are recruited to attend a "sneak preview" of a film before its release. After viewing the movie, the audience completes a survey to

• A) evaluate the quality of directing and producing.
• B) critique the title, plot, and characters.
• C) rate the performances of the individual actors and actresses.
• D) recall specific details of the plot and dialogue.
• E) compare the final film with the original script.

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Definitions:

Interest Due

The amount of interest that has been accrued and is payable on borrowings for a specified period.

Allowance Method

An accounting technique used to estimate and write off bad debts or accounts receivable that are not likely to be collected.

Bad Debts

Amounts owed to a company that are not expected to be collected, often recognized as an expense on the income statement.

Adjusting Entry

Journal entries made at the end of an accounting period to allocate revenue and expenses to the period in which they actually occurred.