To reduce the uncertainty and risk involved in buying raw materials from multiple vendors,Miguel always buys the raw materials for his firm from a preferred vendor.From the perspective of an out-supplier,Miguel's account would be treated as:
A) a bad debt account.
B) a contra account.
C) an uncollectible account.
D) an "always a share" account.
E) a "lost for good" account.

Question

Quizplus · Accepted Answer

Miguel's consistent preference for a single vendor for his raw materials means that from the perspective of an out-supplier (a vendor not chosen by Miguel), his account would be considered a "lost for good" account. This is because the out-supplier has little to no chance of gaining Miguel's business under the current circumstances, as he has already established loyalty with a preferred vendor.

To Reduce the Uncertainty and Risk Involved in Buying Raw