Advertising and sales promotion quiz for unit 4

1. what do smart companies do to account for depreciation?
a. lower their prices
b. locate cheaper vendors
c. put money in savings ( my answer)
d. purchase an insurance policy

2. a balance sheet includes all of the following except?
a. assets
b. depreciation
c. equity
d. liability

3. which of the following types of documents a company prioritize wants and needs?
a. purchase orders
b. income sheets
c. balance sheets
d. liability

true or false questions

vendors submit invoices prior to receiving purchase orders from companies.
true or false

companies must consider profit margin before buying for organizational use.
true or false

6. what factor is usually agreed upon prior to the submission of a purchase order?
a. a schedule of future orders
b. number of products to be purchased
c. price of the products to be purchased
d. delivery method

7. an assest that is predictef to grow is refered to as
a. an investment
b. debt capital
c. equity capital
d. interest

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1. D

2. B

3. A

4. False

5. True

6. A

7. A

Explanation:

1. Smart companies insure their asset to mitigate the effect of depreciation over its useful life. At the end it its useful life, the insurance policy makes the acquisition of new assets easier.

2. The balance sheet has 3 basic sections; assets, liabilities and equity. Hence the correct answer is depreciation.

3. A purchase order (PO) is a commercial document and first official offer issued by a buyer to a seller indicating types, quantities, and agreed prices for products or services.

4. purchase orders generally include the name of the company purchasing the goods or services, date, the description and quantity of the goods or services, price, a mailing address, payment information, invoice address, and a purchase order number. Hence, the invoice is gotten after purchase order have been submitted.

5. Before setting a price for your product, you have to know the costs of running .Most important is to add profit in your calculation of costs. Many manufacturers use cost-plus pricing.

6. Purchase order is usually drafted from a schedule of future orders. A schedule of future order is a list of prospective orders.

7. To invest is to allocate money in the expectation of some benefit in the future. In finance, the benefit from an investment is called a return.

month 1 start amount =$3287.90 interest=(3287.90x0.0145/12)3.97 total to pay=$3291.81 paid =$1200 balance =$2,091.87

month 2 starting amount= $2,091.87 interest =$25.28 total to pay =$2117.15 paid =$1200 balance $917.15

month 3 starting amount =$917.15 interest =$11.08 total to pay =$928.23 paid =$928.23 balance =$0 total to pay 1200+1200+928.23 = $3328.23 it will take 3 months to pay a total of $3328.23