Distribution Agreements Which Limit Sales by Customer or Territory

question 280

Multiple Choice

Distribution agreements which limit sales by customer or territory:

• A) are always illegal.
• B) may be legal if they are horizontal agreements between producers and intermediaries.
• C) are definitely illegal if they are horizontal agreements among competing producers or intermediaries, but may be legal if they are vertical agreements.
• D) are definitely illegal if they are vertical agreements between producers and intermediaries.
• E) None of these alternatives is correct.

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Definitions:

Reversal

The process of undoing or nullifying a previous accounting entry or transaction.

Impairment Loss

The difference when the recorded value of an asset or a cash-producing entity surpasses the amount it can be recovered for.

Depreciable Asset

An asset that loses value over time due to wear and tear, obsolescence, or age, and for which depreciation can be applied.