Select the Incorrect Statement Regarding Service Companies

question 96

Multiple Choice

Select the incorrect statement regarding service companies.

• A) Service companies do not maintain a Finished Goods Inventory account.
• B) Service companies accumulate their service costs in a Work in Process Inventory account similar to manufacturers.
• C) Service companies may have raw material costs.
• D) Understanding the cost of providing a service is just as important as knowing the cost of making a product.

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Definitions:

Computer Programs

The sequences of instructions for the computer, which comprise software.

User Requirements

Specifications or conditions defined by users that a system, product, or service must meet to be considered satisfactory.

Economic Feasibility

Assessment of the financial aspects of a project or system to evaluate whether the projected benefits outweigh the costs, ensuring it is economically viable.

Financial Risk

The possibility of losing money on an investment or business venture.