Ray Inc., a shoe manufacturer, pays a good amount to a department store to allow it to display its shoes in the store's window where they are likely to attract a lot of attention from customers.The money paid by Ray's to the department store is an example of a(n):
A)premium price.
B)markdown.
C)listing allowance.
D)rebatable expense.
E)improvement value expense.

Question

Quizplus · Accepted Answer

The money paid by Ray's to the department store is an example of a listing allowance, which is the fee paid by a manufacturer or distributor to a retailer for listing its products in a particular store or chain of stores. It is paid to ensure that the products are prominently displayed or marketed in a way that will attract customers. Premium price refers to a higher price charged for a product or service that is perceived to have higher quality or value. Markdown refers to a reduction in the price of a product to clear inventory. Rebatable expense refers to an expense that can be claimed back as a rebate. Improvement value expense refers to the cost incurred in improving or renovating a property. None of these choices are relevant in the given scenario.

Ray Inc, a Shoe Manufacturer, Pays a Good Amount to a a Department