When General Motors provides payments or price reductions to its new car dealers as rewards for participating in advertising and sales support programs,it is granting a ________.
A)trade discount
B)functional discount
C)captive product discount
D)promotional allowance
E)by-product allowance

Question

Quizplus · Accepted Answer

This scenario describes a promotional allowance, which is a payment or price reduction provided by a manufacturer to its dealers as a reward for participating in advertising and sales support programs. Trade discounts are discounts given to bulk buyers, functional discounts are discounts given for performing certain functions (such as paying cash instead of credit), captive product discounts are discounts given on complementary products, and by-product allowances are discounts given to dealers for handling and selling by-products of the manufacturer's main product.

When General Motors Provides Payments or Price Reductions to Its