Contracting with a Third Party or an External Company to Manufacture

question 29

Multiple Choice

Contracting with a third party or an external company to manufacture a good or deliver a service is known as ______.

• A)offshoring
• B)outsourcing
• C)domestic production
• D)internalization

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Definitions:

Cash Receipt

The collection of money (currency, checks, electronic transfers) by a business or individual, typically documented for accounting purposes.

Compensating Balance

A minimum account balance that a borrower agrees to maintain in a bank account as a condition for receiving a loan, often to compensate the bank for the loan or to secure better loan terms.

Footnotes

Additional information provided at the end of financial statements to give more detail or provide explanations about items in the financial statements.

Credit Sale

A type of transaction in which goods or services are provided to a customer with the understanding that payment will be made at a later date.