Merchandising businesses differ from service businesses. Explain some of the differences that make the businesses different from each other. Use evidence from the text below to support your response. For example, -In the text, it says," ___________________." Read: A service business sells its services for a fee. A merchandising business is a business that purchases goods and sells them. If you are selling those goods to the general public for use or consumption, your business is a retail merchandising business. Many of the transactions of a service business and a merchandising business are the same. You pay cash for supplies and buy on account, just like in a service business. However, transactions like these occur more often and include different elements to account for. For example, there is a lot more purchasing of goods on account to have an inventory to sell. Also, an asset account for all those purchases is needed. A merchandising business may have a much higher volume of sales and may have to charge sales tax depending on city, county, and state regulations. A separate account needs to be created for that liability. With the increase in transactions that are specific to this type of business, expanding the journal to accommodate the business’s additional needs is appropriate. Selling merchandise rather than a service is what makes the activities different. More purchases are involved in a merchandising business.
Merchandising businesses differ from service businesses. Explain some of the differences that make the businesses different from each other. Use evidence from the text below to support your response. For example, -In the text, it says," ___________________."
Read:
A service business sells its services for a fee. A merchandising business is a business that purchases goods and sells them. If you are selling those goods to the general public for use or consumption, your business is a retail merchandising business. Many of the transactions of a service business and a merchandising business are the same. You pay cash for supplies and buy on account, just like in a service business. However, transactions like these occur more often and include different elements to account for. For example, there is a lot more purchasing of goods on account to have an inventory to sell. Also, an asset account for all those purchases is needed. A merchandising business may have a much higher volume of sales and may have to charge sales tax depending on city, county, and state regulations. A separate account needs to be created for that liability. With the increase in transactions that are specific to this type of business, expanding the journal to accommodate the business’s additional needs is appropriate. Selling merchandise rather than a service is what makes the activities different. More purchases are involved in a merchandising business.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
