When Two or More Divisions Mark Up Prices in Excess

question 99

Multiple Choice

When two or more divisions mark up prices in excess of marginal cost,

• A)double marginalization occurs.
• B)two-part pricing occurs.
• C)second-degree price discrimination occurs.
• D)none of the statements associated with this question are correct.

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Definitions:

Quarter

A three-month period on the financial calendar that acts as a basis for periodic financial reporting and dividends.

Post-Closing Trial Balance

A summary of all accounts after closing entries are made, used to check the accuracy of closing entries and the balance of permanent accounts.

Adjusted Trial Balance

A list of all accounts and their final balances after all end-of-period adjusting entries have been made, used to prepare financial statements.

Revenue Recognition

The accounting principle that determines the specific conditions under which revenue is recognized and recorded in financial statements.