The Major Difference in the Balance Sheet Between a Service

question 38

Multiple Choice

The major difference in the Balance Sheet between a service business and a merchandising business is:

• A)that the Balance Sheet of a merchandising business includes Equipment as a current asset.
• B)that the Balance Sheet of a merchandising business includes Prepaid Expenses as a long-term asset.
• C)that the Balance Sheet of a merchandising business includes Inventory as a current asset.
• D)nothing. There are no differences between the two.

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Definitions:

Domestic Output

The total value of all goods and services produced within a country's borders in a given time period.

Transfer Payments

Payments made by governments to individuals or other entities without requiring a good or service in return, such as welfare or social security payments.

Government Purchases

Expenditures by the government sector on final goods and services in a given period.

Resources

Assets or inputs used in the production of goods and services, such as land, labor, capital, and entrepreneurship.