A Claim That a Price Is Below a Manufacturer's Suggested

question 22

Multiple Choice

A claim that a price is below a manufacturer's suggested or list price may be deceptive if

• A) the items for sale had been purchased from another retailer.
• B) the items for sale were part of a manufacturer's promotional allowance.
• C) the items were part of a bulk order.
• D) few or no sales occur at that price in a retailer's market area.
• E) the items were purchased from the manufacturer at a higher price and the sale was part of a loss-leader promotion.

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Definitions:

Recognize Income

The process of reporting income when it is earned, according to accounting principles, regardless of when it is received.

Unemployment Compensation

Financial benefits provided to individuals who have lost their job through no fault of their own, as a means to temporarily assist them while they seek new employment.

Taxable

Relates to income, assets, or transactions that are subject to tax by governmental authorities.

Gross Profit Percentage

A financial metric that represents the proportion of money left over from revenues after accounting for the cost of goods sold, expressed as a percentage.