In Determining Lifetime Value for Individual Customers, Customer Acquisition Costs

question 168

Multiple Choice

In determining lifetime value for individual customers, customer acquisition costs are determined by dividing:

• A)advertising costs by the number of customer transactions.
• B)total marketing and advertising costs by the number of new customers.
• C)total marketing and advertising costs by the number of total customers.
• D)advertising costs associated with acquiring new customers by the number of new customers.

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Definitions:

Credit

An accounting entry that may either decrease assets or expenses or increase liabilities, equity, and income, recorded on the right side of an accounting ledger.

Trial Balance

An accounting report that lists all the balances in a company's ledger accounts, used to check the accuracy of bookkeeping entries.

Account Balance

The amount of money held in a financial repository, such as a bank account, at any given moment, reflecting all completed transactions.

Posting Errors

Mistakes made during the recording of financial transactions to the general ledger or subsidiary ledgers.