Which One of the Following Reasons Best Explains the Recession-Resistant

question 18

Multiple Choice

Which one of the following reasons best explains the recession-resistant nature of services?

• A) Services cannot be inventoried.
• B) Many services, such as healthcare, are essential.
• C) Many service employees, such as those who work on commission, do not need to be laid off during recessions.
• D) The number of jobs in maintenance and repair services increases during recessions.

---

Definitions:

Accounting Equation

The fundamental equation of double-entry bookkeeping, stating that assets = liabilities + owners' equity.

Purchases Equipment

The process of acquiring physical assets like machinery or office supplies that are used in the operations of a business.

Liabilities Increase

Refers to a rise in the obligations or debts that a company owes, which may affect its financial health.

Net Income

The end profit of a company after revenue has been reduced by expenses and taxes.