Chris Works for a Hardware Store

question 26

Multiple Choice

Chris works for a hardware store.His boss directs him to make a list of manufacturers whose brand names were included in the store's recent newspaper ads and to put copies of the ads with the invoices from each manufacturer.Chris's boss is documenting a(n)

• A) advertising allowance.
• B) slotting allowance.
• C) quantity discount.
• D) loss leader pricing deduction.
• E) seasonal discount.

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Definitions:

Selling Expenses

Costs incurred directly and indirectly in selling a product, including advertising, sales staff salaries, and commissions.

Administrative Expenses

Costs related to the general operation of a business that are not directly tied to producing goods or services.

Period Costs

Expenses that are incurred regardless of the level of production, such as sales and administrative costs, and are directly expensed on the income statement.

Direct Materials

refers to raw materials that are directly traceable to the manufacturing of a product and are an integral part of the finished product.