Which of the following is the primary source of revenue for a service business?
A. the production of products from raw materials
B. the purchase and resale of finished products
C. providing intangible goods and services
D. the sale of raw materials to manufacturing firms
Concept introduction:
An organization can be classified into manufacturing or servicing firm. The activities done under manufacturing business are manufacturing, payment to the supplier, sales and receipts from the customer.
To choose:
The primary source of revenue for a service business.
Answer to Problem 1MC
C. Providing intangible good and services
Explanation of Solution
Explanation for correct answer:
The primary source of revenue for a service business is providing intangible good and services. Hence the correct option is C.
Explanation for incorrect answers:
A. The primary source of revenue for a service business is providing intangible good and services. Hence this option is incorrect.
B. The primary source of revenue for a service business is providing intangible good and services. Hence this option is incorrect.
D. The primary source of revenue for a service business is providing intangible good and services.. Hence this option is incorrect.
Want to see more full solutions like this?
Chapter 2 Solutions
Principles of Accounting Volume 2
Additional Business Textbook Solutions
Financial Accounting (11th Edition)
Horngren's Financial & Managerial Accounting, The Managerial Chapters (6th Edition)
Managerial Accounting (4th Edition)
Principles of Accounting Volume 1
Intermediate Accounting (2nd Edition)
Horngren's Accounting (11th Edition)
- Which of the following is the primary source of revenue for a manufacturing business? A. the production of products from raw materials B. the purchase and resale of finished products C. the provision of intangible goods and services D. both the provision of services and the sale of finished goodsarrow_forwardWhich of the following is the primary source of revenue for a merchandising business? A. the production of products from raw materials B. the purchase and resale of finished products C. the provision of intangible goods and services D. the sale of raw materials to manufacturing firmsarrow_forwardWhich of the following represents the components of the income statement for a manufacturing business? A. Sales Revenue - Cost of Goods Sold = gross profit B. Service Revenue - Operating Expenses = gross profit C. Service Revenue - Cost of Goods Manufactured = gross profit D. Sales Revenue - Cost of Goods Manufactured = gross profitarrow_forward
- For the following descriptions state whether the cost is controllable or uncontrollable by responsibility center managers. A. property tax of an existing manufacturing facility B. research and development of a product C. advertising of a product D. insurance cost of the existing manufacturing facility E. design of a productarrow_forwardWhich of the following represents the components of the income statement for a service business Sales Revenue - Cost of Goods Sold = gross profit Service Revenue - Operating Expenses = operating income Sales Revenue - Cost of Goods Manufactured = gross profit Service Revenue - Cost of Goods Purchased = gross profitarrow_forwardWhich of the following represents the components of the income statement for a merchandising business? A. Sales Revenue - Cost of Goods Sold = gross profit B. Service Revenue - Operating Expenses = gross profit C. Sales Revenue - Cost of Goods Manufactured = gross profit D. Service Revenue - Cost of Goods Purchased = gross profitarrow_forward
- Explain how the income statement of a manufacturing company differs from the income statement of a merchandising company.arrow_forwardWhich of the following is the primary source of revenue for a manufacturing business?arrow_forwardWhich of the following costs would be considered a period rather than a product cost in a manufacturing company? Manufacturing equipment depreciation. Property taxes on corporate headquarters. Direct materials costs. Electrical costs to light the production facility.arrow_forward
- Which can be considered a product cost in a manufacturing company? - corporate tax -sales commissions - property rate -equipment depreciationarrow_forwardWhich statement is NOT true? a. Business activities begin with the acquisition of materials, property, and labor in exchange for cash. b. The conversion cycle includes the task of determining raw materials requirements. c. Manufacturing firms have a conversion cycle but retail firms do not. d. A payroll check is an example of a product document of the payroll system. e. A journal voucher is actually a special source document.arrow_forwardWho among the following is not a cost of a product? The expense of the company's fuel. The cost of power at the manufacturing foreman's office Depreciation on the company's installed plant The price of delivering finished goods to clients.arrow_forward
- Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College