Terrell Is Trying to Decide Whether to Concentrate His Purchases

question 132

Multiple Choice

Terrell is trying to decide whether to concentrate his purchases with one supplier or diversify with two or three.One factor in favour of a single supplier is:

• A)insurance against interruptions caused by strikes.
• B)a particular supplier's superiority in product quality.
• C)knowing the customer's loyalty, the supplier may provide better prices and service.
• D)locating the best source in terms of price, quality and service with each purchase.

Account for long-term investments, including the preparation of journal entries for purchase, dividend receipt, and interest accruals.

Differentiate between available-for-sale, held-to-maturity, and held-for-trading securities and their accounting treatment.

Assess a company's financial performance through return on total assets calculation.

Explain the accounting for and reporting of equity securities having significant influence over an investee.

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Definitions:

Continuous Improvement

An ongoing effort to improve products, services, or processes by making incremental improvements over time.

Bottlenecks

Points of congestion or obstruction in a system that significantly delay or impede its overall function or efficiency.

Customer Value

The understanding of a product or service's value to a customer compared to other available options.

Profitability

The ability of a business to earn a profit, reflected in the difference between its revenue and expenses.