Which of the Following Statements Concerning How Market Factors Affect

question 54

Multiple Choice

Which of the following statements concerning how market factors affect channel decisions is true?

• A) Industrial customers tend to buy in larger quantities and require more customer service
• B) Geographically concentrated target markets should be served with an indirect sales force
• C) Widely dispersed markets require fewer intermediaries
• D) New firms in extremely competitive markets will be more successful if they use indirect channels
• E) A very large market requires fewer intermediaries

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Definitions:

Direct Write-off

A method of accounting for bad debts where uncollectible accounts receivable are directly written off against income at the time they are deemed uncollectible.

Bad Debts Recovered

When an account receivable has been written off and is recovered, this account, which is in the Other Revenue category, is credited in the direct write-off method if the recovery is in a year following the write-off.

Allowance for Doubtful Accounts

A contra asset account that estimates the portion of receivables that may not be collectible, affecting a company’s net income and assets.

Bad Debts Expense

An expense reported on the income statement, representing the estimated irrecoverable amounts from customers who can no longer pay their obligations.