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Which of the following best describes the difference between the accounting cycle of a merchandising company and that of a service company? ○ There is no difference between the accounting cycle of a merchandising company and that of a service company. O The merchandising company must prepare reversing entries as part of the accounting cycle, while such entries are optional for the service company. O The merchandising company must prepare an unadjusted trial balance prior to recording adjusting entries, while a service company is not required to do this. The service company must prepare a post-closing trial balance, while such a trial balance is optional for the merchandising company.

Which of the following best describes the difference between the accounting cycle of a merchandising company and that of a service company? ○ There is no difference between the accounting cycle of a merchandising company and that of a service company. O The merchandising company must prepare reversing entries as part of the accounting cycle, while such entries are optional for the service company. O The merchandising company must prepare an unadjusted trial balance prior to recording adjusting entries, while a service company is not required to do this. The service company must prepare a post-closing trial balance, while such a trial balance is optional for the merchandising company.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Which of the following best describes the difference between the accounting cycle of a merchandising company and that of a service company? ○ There is no difference between the accounting cycle of a merchandising company and that of a service company. O The merchandising company must prepare reversing entries as part of the accounting cycle, while such entries are optional for the service company. O The merchandising company must prepare an unadjusted trial balance prior to recording adjusting entries, while a service company is not required to do this. The service company must prepare a post-closing trial balance, while such a trial balance is optional for the merchandising company.
Transcribed Image Text:Which of the following best describes the difference between the accounting cycle of a merchandising company and that of a service company? ○ There is no difference between the accounting cycle of a merchandising company and that of a service company. O The merchandising company must prepare reversing entries as part of the accounting cycle, while such entries are optional for the service company. O The merchandising company must prepare an unadjusted trial balance prior to recording adjusting entries, while a service company is not required to do this. The service company must prepare a post-closing trial balance, while such a trial balance is optional for the merchandising company.
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