In the Relationship Era, Firms Began to Recognize That Cultivating

question 147

Multiple Choice

In the relationship era, firms began to recognize that cultivating current customers is more profitable than constantly doing which of the following?

• A) partnering with community investors
• B) seeking global competition
• C) creating new goods and services
• D) seeking new customers

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Definitions:

Direct Write-off Method

A method of accounting for bad debts that directly writes off specific debts as they are deemed unrecoverable.

Uncollectible Accounts

Uncollectible accounts are debts from customers that a company has attempted to collect but determined they cannot be recovered and are thus written off as a loss.

Expense Recognition Principle

An accounting principle that dictates the conditions under which an expense is recognized and reported in the financial statements.

Percent of Receivables Method

An accounting technique used to estimate the amount of a company's accounts receivable that will not be collected, based on a percentage of the total accounts receivable.