Question

major differences between service companies and retail or manufacturing companies is that retailers and manufacturers must account for

Answer 1

The main difference between service companies and retail or manufacturing companies is that retailers and manufacturers must account for;

• Inventory and Cost of Goods

Inventory refers to the goods in stock which the business wishes to sell in order to make a profit from.

Retailers and manufacturers produce items that will be sold and these items need to be stocked somewhere till the need for them arises.

The same is not applicable to service companies because they do not have physical goods to sell.

Also, the cost of goods refers to the direct cost of producing goods. Since service companies do not produce goods, this is not accounted for.

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