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Multiple Choice Question Businesses typically buy goods or services from others on account for cash in exchange for services
Ask by Wood Kelley. in the United States
Jan 25,2025
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Businesses usually buy goods or services on account.
**Answer:** A) On account
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It looks like you've provided a multiple-choice question with two options. Here's a structured version of the question along with the answer:
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**Multiple Choice Question**
**Businesses typically buy goods or services from others:**
A) On account
B) For cash in exchange for services
**Correct Answer:** **A) On account**
**Explanation:**
Businesses often purchase goods or services on account, meaning they receive the items or services now and agree to pay for them at a later date. This practice allows companies to manage their cash flow more effectively by deferring payments. While some transactions do occur for cash in exchange for services, especially in smaller or one-time deals, purchasing on account is a common and standard practice in most business environments.
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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!
