Adequate Cash Flow Can Be Especially Critical If the Business

question 90

Multiple Choice

Adequate cash flow can be especially critical if the business is a ______.

• A) manufacturing business
• B) service business
• C) seasonal/cyclical business
• D) health care business

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Definitions:

Franchise Revenue

Income generated from the operation of a franchised business model, typically including fees and royalties paid by franchisees.

Matching Principle

An accounting principle that dictates expenses should be matched with the revenues they help generate, within the same accounting period.

Franchise Arrangements

Agreements where one party (the franchisor) grants another party (the franchisee) the right to use its trademark or brand name and operate a business under its business model.

Exclusive Right

A legal provision granting someone the sole authority to undertake a particular activity or use a specific property.