Many Factors Have Been Identified That Distinguish Organizational and Industrial

question 30

Multiple Choice

Many factors have been identified that distinguish organizational and industrial purchase decisions from individual consumer decisions. Which of the following is NOT one of those distinctions?

• A) Purchase decisions made by companies frequently involve many people.
• B) Organizational and industrial products are often bought according to precise, technical specifications.
• C) Impulse buying commonly occurs in organizational purchasing because of sales stimulation from direct salespeople.
• D) Organizational purchase decisions tend to be riskier than individual consumer purchase decisions.

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Definitions:

Recognized Gain

The portion of a gain that is subject to tax, as realized from the sale or exchange of a capital asset beyond the original purchase price.

Section 1245

A section of the U.S. Internal Revenue Code that deals with the tax treatment of depreciable property and requires the recapture of depreciation upon sale of the property as ordinary income.

Section 1231

A tax provision related to the treatment of gains and losses on property used in a trade or business or held for the production of income.

Depreciation

A method of allocating the cost of a tangible asset over its useful life.