The Intangibility Aspect of a Service Means That

question 41

Multiple Choice

The intangibility aspect of a service means that

• A) there is a lack of perceived quality compared to a tangible good.
• B) unused capacity cannot be stockpiled or inventoried for later use.
• C) consumers may have a problem evaluating service offerings.
• D) services are not produced at the same time they are consumed.
• E) services are not labor-intensive.

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Definitions:

Prepaid Expenses

Payments made in advance for goods or services to be received in the future, recorded as assets on the balance sheet until they are consumed or used.

Indirect Method

A method of presenting the operating activities section of the statement of cash flows that adjusts net income to compute cash flows from operating activities.

Net Income

The net income of a company, which is the remaining amount of total revenue after deducting all expenses and taxes.

Inventory

The total amount of goods and materials held by a company intended for sale or production.