why is it important to identify the elements of statement of comprehensive income in both service and merchandising business?
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2
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Both merchandising companies and service companies prepare income statements to help investors, analysts, and regulators understand their internal financial operations. ... If you look at an income statement for a service company, you will not see a line item for the cost of goods sold.
bernasprincesscharme:
so why is it important to know which account uses ins service business and which account uses in merchandising business?
A service-based business will usually experience a decline in net income largely due to a decline in revenue, rather than an increase in expenses. In a merchandising company, a decrease in net income is just as likely to occur because of an increase in expenses as a decrease in revenues.
Answered by
3
Answer:
Both merchandising companies and service companies prepare income statements to help investors, analysts, and regulators understand their internal financial operations. ... If you look at an income statement for a service company, you will not see a line item for the cost of goods sold.
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