The Practice of Setting Price Below Cost with the Intent

question 20

Multiple Choice

The practice of setting price below cost with the intent to drive competitors out of business:

• A) predatory pricing.
• B) target pricing.
• C) target costing.
• D) peak-load pricing.

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Definitions:

Adjustments Columns

Columns in accounting records used to make necessary modifications to account balances before preparing the final financial statements.

Adjusted Trial Balance

A financial statement that displays all balances of accounts after adjustments have been made, used to prepare final financial statements.

Unadjusted Trial Balance

A list of all the general ledger accounts and their balances at a specific point in time before any adjustments are made for the accounting period.

Columnar Working Paper

An accounting paper used for preparing financial statements or other reports, organized with columns to facilitate data entry and comparison.