Which of the Following Assets Does a Merchandising Company-But NOT

question 138

Multiple Choice

Which of the following assets does a merchandising company-but NOT a service company-need?

• A) Accounts receivable
• B) Prepaid insurance
• C) Merchandise inventory
• D) Equipment

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Definitions:

Sales

The activity or business of selling products or services.

Expenses

Outflows of money or other valuable assets, incurred as a result of operating activities or in the pursuit of generating revenues.

Debts Incurred

Obligations or liabilities taken on during the course of financial transactions, often as a result of borrowing money or purchasing goods and services.

Owner's Equity

The residual interest in the assets of the business after deducting liabilities, representing the ownership's financial stake.