Question

what accounting activities make a merchandising business differ from a service business? question 9 options: the purchasing of supplies and insurance the selling on account the owners capital and drawing account the purchasing and selling of products

Answer 1

The primary difference between a merchandising and a carrier-primarily based commercial enterprise is the presence of inventory. merchandising companies promote items to purchasers, whereas provider-primarily based agencies do no longer. The organization's economic statements, which include the profits statements, ought to replicate this distinction.

Although merchandising and service businesses use the same 4 final entries, merchandising groups typically have extra temporary debts to shut. the extra debts consist of income, sales returns and allowances, income discounts, purchases, purchases returns and allowances, purchases discounts, and freight‐in.

Accounting for a merchandising commercial enterprise requires understanding the prices and phrases of buying from providers. The higher a commercial enterprise proprietor can negotiate terms, the higher his profit margins can be, and the less risk he assumes, based on capability loss or breakage.

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