Question

Which of the following is a characteristic of a service company?

A) It transforms raw materials into finished goods.
B) It has a single category of inventory.
C) It does not have tangible products intended for sale.
D) It makes a product.

Answer 1

The correct characteristic of a service company is that it does not have tangible products intended for sale, as service companies offer intangible products like expertise and services. The correct option is c.

Step-by-step explanation:

The characteristic of a service company is C) It does not have tangible products intended for sale. Unlike manufacturing companies that transform raw materials into finished goods and may have various categories of inventory, service companies primarily offer intangible products, such as expertise, experience, and service provision.

For example, accounting firms, law offices, and consultancies provide services rather than physical goods, and thus do not deal with inventory in the traditional sense of the word. The correct option is c.