Select the Incorrect Statement Regarding Service Companies

question 5

Multiple Choice

Select the incorrect statement regarding service companies.

• A) Because service companies do not carry inventory, it is impossible to determine product costs.
• B) Because the products of service companies are consumed immediately, there is no finished goods inventory on their balance sheets.
• C) Managers of service companies are expected to control costs, improve quality, and increase productivity just like managers of manufacturing companies.
• D) Material, labor, and overhead costs of service companies are treated as period costs.

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Definitions:

Unethical

Actions or decisions that go against moral principles or standards of conduct.

Paralanguage

Involves the non-verbal elements of communication used to convey emotion and modify meaning, such as tone of voice, loudness, and pitch.

Facial Expressions

Visible changes in the face that convey an individual's emotions, intentions, or social information.

Gestures

Physical movements, often made with the hands or face, that express ideas, emotions, or provide non-verbal communication.