What Is a Secondary Market

question 236

Multiple Choice

What is a secondary market?

• A)a market where factory seconds and damaged merchandise are sold
• B)a market where newly issued bonds are sold to initial buyers by the borrowing firm
• C)a market where a newly issued stocks are sold to initial buyers by the borrowing firm
• D)a market where you can sell any stocks you own as a private investor

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Definitions:

Credit Sales

Transactions in which goods or services are sold and payment is deferred, allowing customers to purchase products or services on account.

Uncollectible Accounts

Accounts receivable that are recognized as uncollectible losses due to the inability to collect from the debtor.

Allowance Method

An accounting technique used to estimate and account for bad debts (uncollectible receivables) based on historical data or economic conditions.

Allowance for Doubtful Accounts

A contra asset account used to estimate the portion of a company's receivables that may ultimately not be collected.