Laura and Marie Own and Operate a Small Restaurant

question 56

Multiple Choice

Laura and Marie own and operate a small restaurant. On a weekly basis, they go to their local Sam's Wholesale Club to purchase the food items and cleaning supplies they need for their business. With the exception of the volume they purchase and the items' intended use, this grocery shopping trip is identical to a weekly trip by their families to a grocery store. Sam's is serving as a ____ wholesaler for these entrepreneurs.

• A) general-line
• B) specialty-line
• C) full-service merchant
• D) truck
• E) cash-and-carry

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Definitions:

Recognized Immediately

The principle of recording revenues or expenses in the accounting period when they occur, regardless of when cash is received or paid.

Asset Turnover

A financial ratio indicating how efficiently a company uses its assets to generate sales.

Average Total Assets

A measure that calculates the mean value of a company's assets over a specific period, often used to assess how efficiently these assets are used.

Net Sales

The total revenue from goods or services sold less returns, allowances, and discounts.