Which Method of Business Buying Is Most Likely to Be

question 57

Multiple Choice

Which method of business buying is most likely to be used when the products being purchased are standardized based on certain characteristics?

• A) Homogeneous selection
• B) Inspection
• C) Description
• D) Sampling
• E) Negotiation

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Definitions:

Allowance for Doubtful Accounts

A method used in accounting to estimate the portion of accounts receivable that may not be collected.

Contra Asset

An account that is used to reduce the value of a related asset, such as accumulated depreciation reducing the book value of fixed assets.

Normal Balance

The side (debit or credit) of an account that is expected to have a higher balance, indicating the side which increases the account.

Allowance Method

A financial method that estimates the value of debts unlikely to be collected by determining uncollectible accounts each period's end.