Consumers Have More Difficulty Evaluating Services Than They Do Products;

question 108

Multiple Choice

Consumers have more difficulty evaluating services than they do products; the difficulty results from the

• A) intangibility of services.
• B) incongruity of services.
• C) inseparability of services.
• D) inflexibility of services.
• E) interdependence of services.

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Definitions:

Accounts Receivable Turnover

A financial ratio that measures how effectively a company is collecting on its credit sales by dividing net credit sales by average accounts receivable.

Horizontal Analysis

A side-by-side comparison of two or more years’ financial statements.

Vertical Analysis

A method of financial statement analysis in which each entry for each of the three major categories of accounts (or financial statements) is represented as a proportion of the total account.

Common-Size Financial Statement

A financial analysis tool that presents all line items as a percentage of a common base figure, making it easier to compare financial statements of different-sized companies.