Q25-22RQ - Horngren'S Financial And Managerial Accounting

Question

What is outsourcing?

Step-by-Step Solution

Answer

Answer

Outsourcing refers to the process of accomplishing the business tasks and activities by the third parties against a fixed, predetermined consideration.

Step-by-Step Solution Step 1: Meaning of Business Activities

Business activities refer to the variety of functions performed in the business entity. Major business activities are bifurcated into operating, investing, and financing activities.

Step 2: Meaning of Outsourcing

In business terms, outsourcing refers to a practice in which an outsider is hired or allowed by a business entity to perform planned or existing business tasks. It facilitates the business entities to fulfill their needs from outside rather than making in-house.