A Trading Partnership

question 67

Multiple Choice

A trading partnership:

• A)borrows money to avoid cash flow problems.
• B)engages in providing services.
• C)has no substantial inventory.
• D)buys but does not sell merchandise.

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Definitions:

Accounts Receivable Period

The average amount of time it takes for a company to receive payments owed by its customers for goods or services provided.

Inventory

The raw materials, work-in-progress products, and finished goods that a company holds for the purpose of sale in the future.

Cost of Goods Sold

Expenses directly linked to the creation of a company's sold products.

Sales

Sales refer to the transactions where goods or services are exchanged for money, representing the primary source of revenue for most businesses.