Multiple Choice Question Businesses typically buy goods or services from others on account for cash in exchange for services
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Did you know that buying goods "on account," or on credit, allows businesses to obtain inventory without an immediate cash outlay? This practice can help maintain cash flow and manage expenses. Many companies strategically leverage this option to ensure they have enough products on hand to meet customer demand while delaying payment until sales revenue comes in. In terms of real-world application, consider small businesses that partner with suppliers to stock their shelves. For instance, a local coffee shop might receive coffee beans on account and then sell beverages to generate cash, which they can use to pay the supplier later. It’s a win-win situation when managed correctly!