Buying an Existing Business Looks Appealing to the Potential Business

question 49

Multiple Choice

Buying an existing business looks appealing to the potential business owner for which of the following reasons?

• A) The existing firm is already functioning.
• B) The existing firm will always make a profit.
• C) The existing firm will have the best employees.
• D) The existing firm's owner will always provide financing.

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Definitions:

Adjusting Entry

An accounting entry made at the end of an accounting period to allocate income and expenditure to the correct period.

Sales

The activities involved in selling goods or services in return for money or other compensation, fundamental to a company's revenue.

Gift Card Expense

The cost recognized by a business when gift cards are redeemed, typically involving the goods or services provided in exchange for the card.

Redeemed

A term referring to the process of exchanging a financial instrument, such as a bond or coupon, for cash or its equivalent value.