In Terms of Substantiation of Claims in the Advertisements,the Federal

question 126

Multiple Choice

In terms of substantiation of claims in the advertisements,the Federal Trade Commission and courts tend to use each of the following principles,except:

• A) the federal government assumes consumers read ads "broadly" and do not notice details hidden in fine print
• B) tests have to be with the actual product or one that is considered similar
• C) evidence should come from individuals or companies that would be considered by experts by others in the field
• D) the courts and FTC will consider the totality of evidence concerning a claim, not just one particular study that may support a claim

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Definitions:

Voting Common Stock

Shares of a company that grant the shareholder voting rights in corporate decisions, typically related to the election of the board of directors.

Equity Method

An accounting technique used by firms to assess the profits earned by their investments in other companies, where the investment is recorded at cost and adjusted for dividends received and the investor's share of the investee's profit or loss.

Consolidation

The process of combining the financial statements of separate subsidiary entities into one comprehensive financial statement of the parent company.

Goodwill

An intangible asset that arises when one company acquires another for a premium value, representing the excess of the purchase price over the fair market value of the identifiable assets and liabilities.