A Firm Should Decide to Buy Components from a Supplier

question 1

Multiple Choice

A firm should decide to buy components from a supplier (as opposed to making them)

• A) when it has excess plant capacity.
• B) when it will require greater flexibility on the firm's part to accommodate the supplier.
• C) if product quality would be the same (regardless of the firm's decision.)
• D) if the risk of equipment obsolescence can be transferred to the supplier.

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Definitions:

Chart of Accounts

An organized list of all the accounts in a company's general ledger, used for recording and reporting financial transactions.

Journal

A detailed record where all financial transactions of a business are initially recorded before being transferred to accounts in the ledger.

Accounts Payable

Liabilities representing amounts owed to suppliers or creditors for goods and services received that are not yet paid.

Paid to You

This term generally refers to any payment made directly to an individual, often in the context of salaries, dividends, or other forms of income.