Discounting a Product When the Product Does Not Sell at the Original

question 74

Multiple Choice

Discounting a product when the product does not sell at the original price and an adjustment is necessary, is referred to as _________.

• A)markdown
• B)residual markdown
• C)price sensitivity
• D)concession pricing
• E)dispensation pricing

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Definitions:

Percent of Sales Method

A financial forecasting model that predicts future variables, such as expenses and inventory levels, as a percentage of projected sales.

Credit Sales

Sales of goods or services that are paid for at a later date, extending credit to customers.

Bad Debt Expense

An expense reported by businesses to account for receivables that are no longer collectible, affecting the net income.

Allowance for Doubtful Accounts

A contra-asset account on the balance sheet, estimating the amount of receivables that are expected to be uncollectible.