Unlike Merchandising Companies,income Statements of Service Companies Include Cost of Goods

question 115

True/False

Unlike merchandising companies,income statements of service companies include cost of goods sold as a line item.

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Definitions:

Overjustification Effect

A psychological effect where introducing an external incentive for an activity someone already finds rewarding leads to a reduction in intrinsic motivation.

Externality Hypothesis

A theory suggesting that the costs or benefits of an individual’s or a firm’s actions are not fully borne or received by that individual or firm, but also affect others who were not involved in the original action.

Maslow's Hierarchy

A theory in psychology proposed by Abraham Maslow that human needs are arranged in a hierarchy from most basic physiological needs to higher-level needs for self-actualization.

Overjustification Effect

A psychological effect where introducing external rewards for an activity previously enjoyed for its own sake reduces intrinsic motivation to perform that activity.