A Difficult Economic Environment Exists for Service Industries for All

question 8

Multiple Choice

A difficult economic environment exists for service industries for all but one of the following reasons.

• A) Relatively high overall entry barriers.
• B) Product substitution.
• C) Minimal opportunities for economies of scale.
• D) Exit barriers.

---

Definitions:

Cash Basis

An accounting method where revenue and expenses are recognized when cash is received or paid, rather than when earned or incurred.

External Reporting

The preparation and disclosure of financial statements and other information to parties outside the corporation, typically involving public companies.

Long-Term Assets

Assets that are expected to provide economic benefits beyond one year, including property, plant, equipment, and intangible assets.

Employee Wages

Compensation paid to employees for their labor, including salaries, hourly wages, and commissions.