Question

Bennett is a software engineer who starts his own website development firm. His friend, Callie, is the owner of a store that sells office supplies. Bennett designs a new website for Callie's store in exchange for the necessary office supplies and equipment he needs for his business.
Which source of business funding does this scenario best illustrate?

A. mortgaging
B. bartering
C. factoring
D. liquidating
E. equity financing

Answer 1

Answer:

B. Bartering

Explanation:

Bartering refers to transactions which do not involve any money exchange and are rather completed by the exchange of goods or services of similar value.

Bartering represents the most ancient kind of trade wherein no money was involved.

In the given case, a software engineer designs a new website for his friend for which he obtains office supplies and equipments in return instead of any payment. Herein, no payment is received by the engineer for the services rendered.

Rather, office equipments and supplies are received in consideration for the services rendered. This is a case of barter wherein goods are received in exchange for services.