Exam 16: Pricing and Credit Decisions

The aging schedule is a categorization of accounts receivable based on the length of time they have been outstanding.

The Consumer Credit Protection Act requires that the finance charge for credit be stated as an annual percentage rate and that creditors specify the procedures used for correcting billing mistakes.

All of the following are acceptable options available to entrepreneurs attempting to collect delinquent accounts receivable except

The total sales revenue of a small business is a direct reflection of

What would be the break-even point if a firm set a unit selling price of $100 when total fixed costs were $100,000 and variable costs per unit were $80? Draw a graph that depicts the break-even point.

Trade credit is extended by businesses to consumers purchasing large volumes of products.

A pricing tactic whereby a firm sets a high price to convey an image of high quality or uniqueness is known as

Explain what is meant by elastic demand and inelastic demand. Use products to illustrate each type of demand.

Hollywood Amusement, a small independent movie theater, decreased the price of admission from $5 to $4. Prior to the price decrease, the business sold 1,000 tickets each month. After the price decrease, it experienced ticket sales of 1,500 a month. If the change in sales is attributable only to the change in price, Hollywood Amusement faces ____ for its movie tickets.

Bank credit cards are widely accepted by retailers who desire to offer credit but do not have their own credit cards.

Which of the following is a retailer credit card?

In conducting a break-even analysis, it is important for the entrepreneur to realize that demand for a product always decreases as its price increases.

Assume you are responsible for managing accounts receivable in a small business. What are some of the methods you would use?

Which of the following is true with respect to revolving charge accounts?

Prestige pricing (setting a high price to convey an image of high quality or uniqueness) is a pricing tactic that reflects competitive advantage.

Natural Well, a local supplier of natural bottled water, initially sold its product at a premium price of $4 because the company believed consumers would view the bottled water as a prestige item. The company decided that when startup costs had been fully recovered and competition became imminent, the company would reduce the price to a more reasonable $1. Natural Well is implementing a

Juan is using ____ when he systematically compares various cost and revenue estimates in order to determine the acceptability of alternative prices.

A competitor would likely use a ____ pricing strategy for a gaming console intended to compete directly with Sony's Playstation gaming console.

Because it is a standard practice in many types of businesses, credit selling often cannot be avoided.

An installment account is a typical trade credit agreement.