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O Level Accounting (7707)•7707/12/O/N/20
Question 20 from 7707/12/O/N/20

Explanation

Service businesses provide intangible services, not physical goods

Steps:

  • Define a service business as one that sells expertise, labor, or intangible offerings rather than physical products.
  • Evaluate each option: check if the primary activity involves delivering services or selling goods.
  • Identify supermarkets as retailers focused on selling tangible products like food and household items.
  • Confirm the rest involve direct service provision to customers.

Why C is correct:

  • A supermarket is a retail business that primarily sells physical goods, not services, per standard business classification where services are intangible and goods are tangible.

Why the others are wrong:

  • A: Hairdressing salon provides personal grooming services.
  • B: Accountant's practice offers professional financial advice and preparation services.
  • D: Computer repair shop delivers technical repair and maintenance services.

Final answer: C

Topic: The purpose of accounting

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