What Is Meant by the Term Fair-Return Price

question 30

Multiple Choice

What is meant by the term fair-return price?

• A)The price which ensures that the firm is able to make normal profits only.
• B)The price which ensures that the firm is able to make economic profits only.
• C)The price which ensures that the output will be produced at the lowest possible cost.
• D)The price which ensures the best allocation of products.
• E)A price equal to marginal cost.

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Definitions:

Accounts Payable

Amounts a company owes to creditors for goods or services that have been bought on credit and are payable within a specified period.

Subsidiary Ledger

A detailed ledger that contains the details of transactions for individual accounts, which then summarize into the general ledger.

Control Account

An account in the general ledger used to summarize and consolidate transactions from multiple subsidiary accounts.

Accounts Payable Subsidiary Ledger

A book or file that contains, in alphabetical order, the name of the creditor and amount owed from purchases on account.