In the Context of Small Businesses, Which of the Following

question 57

Multiple Choice

In the context of small businesses, which of the following is true of consignment selling?

• A) Payments are made to suppliers only when the products are sold.
• B) It consists of two or more companies exchanging items of roughly equal value.
• C) It allows small businesses to reap tax advantages by selling stock shares to workers.
• D) It is regulated by the Federal Small Business Administration.

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Definitions:

Unrealized Gain

An increase in the value of an asset that has not been sold, hence the profit is not yet realized.

Trading Investments

Securities purchased and held primarily for selling them in the near term to generate income on short-term price differences.

Consolidated Financial Statements

Combined financial reports of a parent company and its subsidiaries, showing the financial results as if they were a single entity.

Common Stock

A form of investment that signifies part ownership in a corporation, granting the investor voting privileges and a portion of the company's earnings through dividends.