Distinguish between merchandising businesses from a service business.

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Answer 1

Question

Chapter 6, Problem 1DQ

To determine

Distinguish between merchandising businesses from a service business.

Expert Solution & Answer

Explanation of Solution

The following table shows the differences between a merchandising business and service business.

Details	Merchandising Company	Service Company
Meaning	A merchandising company generates income by selling goods to its customers.	A service company produces income by providing services to their customers.
Type of Revenues	Sales Revenue Example: Selling price of merchandise inventory.	Service Revenue Example: Fees received, Rents received, Interest income.
Type of Expenses	Cost of goods sold and operating expenses Example: Rent, Office supplies, taxes, Utilities, Insurance.	Only operating expenses Example: Rent, Office supplies, taxes, Utilities, Insurance.

Table (1)

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The income statement of a merchandising company includes Cost of Goods Sold (COGS) and gross profit, which are not found on a service company’s income statement. This is because merchandising companies sell physical products, while service companies provide intangible services. Service company income statements are simpler, usually showing revenue from services minus operating expenses like salaries, rent, and supplies. In short, the main difference is that merchandising firms track product costs and gross profit, while service companies do not. Respond to this post. agree or disagree

Answer 2

Question

Chapter 6, Problem 1DQ

To determine

Distinguish between merchandising businesses from a service business.

Expert Solution & Answer

Explanation of Solution

The following table shows the differences between a merchandising business and service business.

Details	Merchandising Company	Service Company
Meaning	A merchandising company generates income by selling goods to its customers.	A service company produces income by providing services to their customers.
Type of Revenues	Sales Revenue Example: Selling price of merchandise inventory.	Service Revenue Example: Fees received, Rents received, Interest income.
Type of Expenses	Cost of goods sold and operating expenses Example: Rent, Office supplies, taxes, Utilities, Insurance.	Only operating expenses Example: Rent, Office supplies, taxes, Utilities, Insurance.

Table (1)

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Answer 3

Question

Chapter 6, Problem 1DQ

To determine

Distinguish between merchandising businesses from a service business.

Expert Solution & Answer

Explanation of Solution

The following table shows the differences between a merchandising business and service business.

Details	Merchandising Company	Service Company
Meaning	A merchandising company generates income by selling goods to its customers.	A service company produces income by providing services to their customers.
Type of Revenues	Sales Revenue Example: Selling price of merchandise inventory.	Service Revenue Example: Fees received, Rents received, Interest income.
Type of Expenses	Cost of goods sold and operating expenses Example: Rent, Office supplies, taxes, Utilities, Insurance.	Only operating expenses Example: Rent, Office supplies, taxes, Utilities, Insurance.

Table (1)

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Answer 4

Question

Chapter 6, Problem 1DQ

To determine

Distinguish between merchandising businesses from a service business.

Expert Solution & Answer

Explanation of Solution

The following table shows the differences between a merchandising business and service business.

Details	Merchandising Company	Service Company
Meaning	A merchandising company generates income by selling goods to its customers.	A service company produces income by providing services to their customers.
Type of Revenues	Sales Revenue Example: Selling price of merchandise inventory.	Service Revenue Example: Fees received, Rents received, Interest income.
Type of Expenses	Cost of goods sold and operating expenses Example: Rent, Office supplies, taxes, Utilities, Insurance.	Only operating expenses Example: Rent, Office supplies, taxes, Utilities, Insurance.

Table (1)

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Answer 5

Chapter 6, Problem 1DQ

To determine

Distinguish between merchandising businesses from a service business.

Expert Solution & Answer

Explanation of Solution

The following table shows the differences between a merchandising business and service business.

Details	Merchandising Company	Service Company
Meaning	A merchandising company generates income by selling goods to its customers.	A service company produces income by providing services to their customers.
Type of Revenues	Sales Revenue Example: Selling price of merchandise inventory.	Service Revenue Example: Fees received, Rents received, Interest income.
Type of Expenses	Cost of goods sold and operating expenses Example: Rent, Office supplies, taxes, Utilities, Insurance.	Only operating expenses Example: Rent, Office supplies, taxes, Utilities, Insurance.

Table (1)

Answer 6

Chapter 6, Problem 1DQ

To determine

Distinguish between merchandising businesses from a service business.

Expert Solution & Answer

Explanation of Solution

The following table shows the differences between a merchandising business and service business.

Details	Merchandising Company	Service Company
Meaning	A merchandising company generates income by selling goods to its customers.	A service company produces income by providing services to their customers.
Type of Revenues	Sales Revenue Example: Selling price of merchandise inventory.	Service Revenue Example: Fees received, Rents received, Interest income.
Type of Expenses	Cost of goods sold and operating expenses Example: Rent, Office supplies, taxes, Utilities, Insurance.	Only operating expenses Example: Rent, Office supplies, taxes, Utilities, Insurance.

Table (1)

Answer 7

Chapter 6, Problem 1DQ

To determine

Distinguish between merchandising businesses from a service business.

Answer 8

Expert Solution & Answer

Explanation of Solution

The following table shows the differences between a merchandising business and service business.

Details	Merchandising Company	Service Company
Meaning	A merchandising company generates income by selling goods to its customers.	A service company produces income by providing services to their customers.
Type of Revenues	Sales Revenue Example: Selling price of merchandise inventory.	Service Revenue Example: Fees received, Rents received, Interest income.
Type of Expenses	Cost of goods sold and operating expenses Example: Rent, Office supplies, taxes, Utilities, Insurance.	Only operating expenses Example: Rent, Office supplies, taxes, Utilities, Insurance.

Table (1)

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

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Distinguish between merchandising businesses from a service business.

Distinguish between merchandising businesses from a service business.

Explanation of Solution

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