A trading partnership:
A)borrows money to avoid cash flow problems.
B)engages in providing services.
C)has no substantial inventory.
D)buys but does not sell merchandise.

Question

Quizplus · Accepted Answer

A trading partnership has an inventory;that is,its regular business is buying and selling merchandise,such as retailing,wholesaling,importing,or exporting.Since there is a time lag between the date they pay for their inventory and the date they sell inventory to their customers,these firms ordinarily need to borrow to avoid cash flow problems.

A Trading Partnership