If the Manufacturer of Cool Whip Were to Introduce a Chocolate-Flavored

question 157

Multiple Choice

If the manufacturer of Cool Whip were to introduce a chocolate-flavored Cool Whip and still continue to produce all of its other Cool Whip products, this would be an example of

• A) a brand extension.
• B) line extension.
• C) functional modification.
• D) quality modification.
• E) a new-to-the-world product.

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Definitions:

Allowance Method

An accounting technique used to estimate bad debts and adjust accounts receivable to reflect only receivables expected to be collected.

Uncollectible Account

A receivable that a company has deemed unlikely ever to be collected and is therefore written off as a bad debt expense.

Trade Accounts Receivable

Amounts owed by customers to a business, specifically from sales transactions.

Net Realizable Value

The estimated selling price of goods, minus the costs of their completion and sale.