Chapter 2, Problem 2.28E

1.

To determine

Manufacturing Companies:

Merchandiser is a person or organization who buys goods with the purpose of sale these goods to the customer. They buy goods either from the manufacturer or from a wholesaler. They sell goods at higher rate than its purchase price.

Merchandising Companies:

Merchandiser is a person or organization who buys goods with the purpose of sale these goods to the customer. They buy goods either from the manufacturer or from a wholesaler. They sell goods at higher rate than its purchase price.

Service-Sector Companies:

Service companies act as a service provider, who do not buy or sell goods. They deal with intangible things. Therefore, the accounts used by the service company are different.

To explain: The difference between manufacturing, merchandising and service-sector companies.

2.

To determine

Cost:

Cost refers to the expenses incurred by the business to earn revenue from sales, in other words cost is the amount given in order to get something.

To explain: The difference between inventoriable costs and period costs.

To determine

3.

To classify: The costs items as inventoriable costs or period costs.