What Is the Main Reason for the Practice of Resale

question 26

Multiple Choice

What is the main reason for the practice of resale price maintenance?

• A)Resale price maintenance is likely to increase demand for the product.
• B)Resale price maintenance is an advertising ploy.
• C)Discounting is perceived as anti-competitive.
• D)Discounting is perceived as detrimental to the market status of the product.

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Definitions:

Liability Accounts

Accounts that represent amounts owed to creditors or bills that must be paid in the future, contributing to a company’s liabilities on the balance sheet.

Post-closing Trial Balance

A list of all company accounts that remain after adjusting and closing entries are made, used to ensure debits equal credits.

Trial Balance

A summary listing of the titles and balances of accounts in the ledger.

Drawing Account

An account used to record amounts withdrawn by the owner of a business for personal use.