Question

accounting for professional service firms differs from manufacturing mainly because: a. there are no materials used...

accounting for professional service firms differs from manufacturing mainly because:

a. there are no materials used in services

b. services are heterogeneous

c. there is no inventory in services

d. services are intangible

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Answer #1

Accounting for professional service firms differs from manufacturing mainly because:


The correct answer is OPTION D i.e services are intangible.


Explanation

Services are such type of output which are intangible. These cannot be held or touched physically (which means they are intangible).

Even though, there is no inventory is used in services. But still the very main difference between professional service firms and manufacturing firm is that " services are intangible "

Other options like :

  • there are no materials used in services
  • services are heterogeneous
  • there is no inventory in services


are not much relevant for considering the difference.

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