Answer:
a debit to Accounts Payable for $1,400 and a $1,400 credit to Purchase Returns allowances
Explanation:
Periodic inventory system is one that updates information on inventory on a periodic basis. This is opposite of perpetual inventory system that requires update of inventory system at all times.
In the scenario the merchandiser bought the goods on account. That means he did not pay cash but rather bought on credit.
On purchasing the items accounts payable will be credited thereby increasing the account balance.
Since the items are being returned a debit will be applied to accounts payable resulting in a decrease in the account balance.
A credit will now be posted to purchase returns allowances to show that products have been returned by a buyer
Answer:
a. keep producing in the short run but exit the market in the long run.
Explanation:
To answer the question, there is a need to look at the effect of the situation on the firm both in the short- run and the long-run
Short Run Effect
The Marginal cost is between average variable cost and average total cost. The business can still continue producing goods because the quantity being produced is still able to cover the average variable cost. This means that the firm is still able meet its variable costs by setting the price of its goods to its marginal cost which is an amount greater than its average variable cost.
Long Run Effect
However, in the long-run the company will begin to have issues even meeting other important costs such as the fixed costs associated with production and as such, the firm will need to exit the market in the long run. For instance the cost of long term loans (principal and interest) may not be covered by the net income of the firm.
Answer:
A) Teeveeland has a comparative advantage in producing televisions.
Explanation:
If Teeveeland has a comparative advantage in producing televisions, then the price of televisions in Teeveeland should be cheaper than the world price. The world price is the average price of a good traded in international markets, in this case televisions.
International trade is based on comparative advantages, since countries export the goods that is can produce more efficiently (they have a comparative advantage in their production) and they trade for goods that they cannot produce efficiently. So if Teeveeland has a comparative advantage in producing televisions, it should start to sell them to the rest of the world.
Answer: deceptive pricing
Explanation:
Overall, the answer could be deduced from the defenitions of those terms.
We can surely exclude green washing, which basically means that the product is sold under "eco", "green" label, when it is not. Puffery is a legal practise, which can not be proven to be true or false; which is clearly not the case in this example.
Now we are left with three categories of deceptive marketing practices. Deceptive packaging means that the product does not fit the image peceived from its package. This might be the design, the size, the picture of the product, etc. Deceptive promotion means that the information on the ads is inaccurate, partly withhold, or false. Deceptive pricing means that the seller offers the product at lower price. This can be done by promoting low price for low-in-stock or out-of stock items and then offering the substituent products of the same category, which are surely more expensive.
