Which of the Following Scenarios Illustrates How Really New Product

question 88

Multiple Choice

Which of the following scenarios illustrates how really new product ideas disrupt the old ways of doing things?

• A) The introduction of a new digital video recorder by a firm, which made video-cassette recorders for TVs obsolete
• B) The introduction of a new range of cell phones by a firm, which has better features than those offered by its competitors
• C) The addition of a new flavored breakfast cereal to a firm's existing line of breakfast cereals
• D) The deletion of an existing product from a firm's line of perfumes because it isn't producing much profit

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Definitions:

Operating Expenses

Expenses incurred during the normal functioning of a business, excluding the cost of goods sold; these can include salaries, rent, utilities, and marketing expenses.

Closing Entries

journal entries made at the end of an accounting period to transfer temporary account balances to permanent accounts, thereby preparing the accounts for the next period.

Capital Account

A financial statement that shows the changes in a company's equity throughout an accounting period, including contributions from and distributions to owners.

Withdrawals Account

An account used to track money taken out of a business by its owner(s) for personal use.