Products and Services Fall into Two Broad Classes Based on the Types

question 159

Essay

Products and services fall into two broad classes based on the types of consumers that use them. Name these two broad classes and describe how they are different from each other.

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Definitions:

Expenses

The outflow of money to another person or company to pay for an item or service or for a category of costs.

Beginning Inventory

The valuation of inventory available for transaction at the start of an accounting timeframe.

Cost of Goods Sold

The financial outlays directly connected with creating the products a company sells, which entail materials and labor.

Purchases Returns and Allowances

Transactions involving the return of goods to suppliers or receiving discounts due to issues like damaged goods, leading to a reduction in purchase costs.