A Firm Has Run a Comparative Ad,and a Competitor Immediately

question 29

Multiple Choice

A firm has run a comparative ad,and a competitor immediately complains that the claims made by the ad are deceptive.In such a case,

• A)the ad agency that created the ad could share responsibility in any action brought by the FTC.
• B)the firm that sponsored the ad might need to provide research proof that its claims are accurate.
• C)the Federal Trade Commission has the power to require corrective advertising-if the ad is really deceptive.
• D)All these answers are correct.

---

Definitions:

Accounting Equation

The fundamental principle of accounting that represents the relationship between assets, liabilities, and owner's equity: Assets = Liabilities + Owner's Equity.

Journal Entry

A record in the books of accounts that represents a business transaction, including information like date, accounts affected, and amounts.

Net Income

The total earnings of a company, calculated as revenue minus expenses, taxes, and costs.

Revenues

The total amount of money received by a company for goods sold or services provided during a specific period.