A Commonly Used Indirect Channel Moves Product from Producer to Retailer

question 215

Multiple Choice

A commonly used indirect channel moves product from producer to retailer to consumer.This channel is used when the cost of inventory makes it too expensive to use a wholesaler or when

• A)the retail outlets are regionally located.
• B)the cost of maintaining inventory is low.
• C)there is little if any seasonal demand.
• D)the risk lies solely with the manufacturer.
• E)the retailer is large and can buy in large quantities from a producer.

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Definitions:

Fair Values

The estimated market value of an asset or liability, based on current conditions and knowledgeable, willing parties' transactions.

Book Values

The value of an asset as reported on the balance sheet, calculated as the original cost of the asset minus any depreciation, amortization, or impairment costs.

Gain or Loss

The financial result of disposing of an asset or settling a liability for more or less than its carrying amount.

Equity Method

An accounting technique used when a company holds significant influence over another but does not control it, allowing the investment to be recorded at original cost and adjusted for the investor's share of profits and losses.