Because No Off-Invoice Allowances Are Offered When a Manufacturer Uses

question 67

Multiple Choice

Because no off-invoice allowances are offered when a manufacturer uses everyday low pricing,EDLP(M) ,retailers _____.

• A) make profits from selling merchandise, rather than from buying it. 
• B) retain the power in the channel 
• C) have incentives to engage in forward buying 
• D) have incentives to engage in diverting 
• E) demand higher slotting allowances

---

Definitions:

Unrealised Profits

Profits that have been reported but not yet realized through cash or other payments.

Consolidation Adjustments

Adjustments made to a parent company's financial statements to eliminate the effects of intercompany transactions when consolidating subsidiaries.

Full Goodwill

An accounting method that recognizes goodwill based on the total purchase price of a subsidiary, including both the parent's and minority interest's share.

Impairment Loss

The amount by which the carrying amount of an asset or cash-generating unit exceeds its recoverable amount.