If You Were Asked to Distinguish Between a Service and a Good

question 7

Multiple Choice

If you were asked to distinguish between a service and a good, you could correctly say

• A) the customer's opinions are valued in the production of goods, but not in the deliverance of services.
• B) that collaboration between buyer and seller is highest for goods.
• C) a greater number of brands are available for services than brands available for goods.
• D) the buyer owns the good after its purchase, but leaves with an experience after a service transaction.

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Definitions:

Ordinary Income

Income earned from normal business operations or employment, subject to regular income tax rates, excluding capital gains or dividends.

Service Partner

A business entity or individual that provides services to another company under a partnership or contractual agreement.

FMV

Fair Market Value, the estimated price at which an asset would change hands between a willing buyer and seller, both having reasonable knowledge and not under compulsion.

Basis

The initial value or purchase price of an asset for tax purposes, used to calculate the gain or loss on the sale of that asset.