Buying Firms Prefer a Transactional Relationship When

question 52

Multiple Choice

Buying firms prefer a transactional relationship when:

• A)the complexity of the purchase is high.
• B)there is a competitive supply market featuring many alternatives.
• C)the supply market is stable.
• D)all of the above
• E)(b)and (c)only

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Definitions:

Indirect Method

A method of computing the net cash provided by operating activities that starts with net income and adjusts it to a cash basis. It is also known as the reconciliation method.

Inventory

Raw materials, work-in-process, and finished goods that a company holds with the intent to sell or use in production.

Wages Payable

An account that records the amounts owed to employees for work performed that have not yet been paid.

Cash Flow

The total sum of cash and cash-like assets moving in and out of a company.