Question

What is a difference between merchandising companies and service enterprises?

a. merchandising companies must prepare multiple-step income statements and service enterprises must prepare single-step income statements.
b. merchandising companies generally have a longer operating cycle than service enterprises.
c. cost of goods sold is an expense for service enterprises but not for merchandising companies.
d. all are differences?

Answer 1

The answer is "b. merchandising companies generally have a longer operating cycle than service enterprises."

A merchandising company is an organization that purchases products and after that exchanges them, for the most part at a higher cost than they were acquired.

A Service Enterprise is an association that doesn't simply draw in volunteers, however works with a culture of volunteerism that empowers it to in a general sense use volunteers and their abilities to accomplish its social mission.