If We Accept the Principle of "Caveat Emptor" - "Let

question 62

Essay

If we accept the principle of "caveat emptor" - "let the buyer beware," why then is there concern about the ethics of advertising. If the consumer is responsible to make the decision, is there anything to justify restricting the advertiser? Explain your view.

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Definitions:

Net Receivables

The total amount of money owed to a company by its customers after accounting for allowances for doubtful accounts.

Credit Sales

Sales made on credit where the payment is received after the service is delivered or the product is sold, thus creating receivables.

Credit Card Service Charge

Fees charged by credit card providers for processing transactions.

Allowance for Doubtful Accounts

An accounting method used to estimate the portion of a firm's receivables that it expects will not be collected.