Question

which accounts are used in a merchandising business but not in a service firm? briefly explain.

​

Answer 1

Answer:

Merchandising companies deal with the resale of items. Typically, merchandising companies are referred to as retailers or wholesalers. Wholesale companies sell products to retailers. Retailers, in turn, sell the product to the end consumer (the customer) at a higher price than they paid when they purchased it. Merchandising companies usually have two types of expenses -- expenses related to the products they are selling, called cost of goods sold, and expenses related to the day-to-day operations of the business. The latter would include rent, utilities, office supplies and staff salaries.