
Corporate Financial Accounting
14th Edition
ISBN: 9781305653535
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Question
Chapter 5, Problem 1DQ
To determine
Merchandising Company and Service Company: A merchandising company generates income by selling goods to its customers. However, a service company produce income by providing services to their customers.
To Differentiate: Between a merchandising business from a service business.
Expert Solution & Answer

Explanation of Solution
The following table shows the differences between a merchandising businesses from a service business.
Details | Merchandising Company | Service Company |
Revenues |
Sales Revenue Example: Selling price of merchandise inventory. |
Service Revenue Example: Fees received, Rents received, Interest income. |
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)
Want to see more full solutions like this?
Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!
Students have asked these similar questions
Provide correct answer with accounting
Kennedy Inc has $23,800 of ending finished goods inventory as of Dec. 31, 2013. If beginning finished goods inventory was $16,300 and COGS was $72,000, how much would Kennedy report for cost of goods manufactured.
What price should the preferred stock sell for this financial accounting question?
Chapter 5 Solutions
Corporate Financial Accounting
Ch. 5 - Prob. 1DQCh. 5 - Prob. 2DQCh. 5 - The credit period during which the buyer of...Ch. 5 - What is the meaning of (A) 1/15, n/60; (B) n/30;...Ch. 5 - Prob. 5DQCh. 5 - Prob. 6DQCh. 5 - Who is responsible for freight when the terms of...Ch. 5 - Name three accounts that would normally appear in...Ch. 5 - Audio Outfitter Inc., which uses a perpetual...Ch. 5 - Assume that Audio Outfitter Inc. in Discussion...
Ch. 5 - Gross profit During the current year, merchandise...Ch. 5 - Purchases transactions Hoffman Company purchased...Ch. 5 - Prob. 5.3BECh. 5 - Prob. 5.4BECh. 5 - Prob. 5.5BECh. 5 - Prob. 5.6BECh. 5 - Determining gross profit During the current year,...Ch. 5 - Prob. 5.2EXCh. 5 - Prob. 5.3EXCh. 5 - Purchase-related transactions A retailer is...Ch. 5 - Purchase-related transactions The debits and...Ch. 5 - Prob. 5.6EXCh. 5 - Purchase-related transactions Journalize entries...Ch. 5 - Prob. 5.8EXCh. 5 - Customer refund Senger Company sold merchandise of...Ch. 5 - Prob. 5.10EXCh. 5 - Sales-related transactions After the amount due on...Ch. 5 - Prob. 5.12EXCh. 5 - Prob. 5.13EXCh. 5 - Determining amounts to be paid on invoices...Ch. 5 - Prob. 5.15EXCh. 5 - Purchase-related transactions Based on the data...Ch. 5 - Prob. 5.17EXCh. 5 - Prob. 5.18EXCh. 5 - Prob. 5.19EXCh. 5 - Normal balances of merchandise accounts What is...Ch. 5 - Income statement and accounts for merchandiser For...Ch. 5 - Income statement for merchandiser The following...Ch. 5 - Determining amounts for items omitted from income...Ch. 5 - Multiple-step income statement On March 31, 2018,...Ch. 5 - Multiple-step income statement The following...Ch. 5 - Prob. 5.26EXCh. 5 - Adjusting entry for customer refunds, allowances,...Ch. 5 - Prob. 5.28EXCh. 5 - Adjusting entry for inventory shrinkage Omega Tire...Ch. 5 - Prob. 5.30EXCh. 5 - Closing entries; net income Based on the data...Ch. 5 - Closing entries On July 31, the close of the...Ch. 5 - Rules of debit and credit for periodic inventory...Ch. 5 - Journal entries using the periodic inventory...Ch. 5 - Identify items missing in determining cost of...Ch. 5 - Cost of goods sold and related items The following...Ch. 5 - Cost of goods sold Based on the following data,...Ch. 5 - Cost of goods sold Based on the following data,...Ch. 5 - Prob. 5.39EXCh. 5 - Closing entries using periodic inventory system...Ch. 5 - Purchase-related transactions using perpetual...Ch. 5 - Sales-related transactions using perpetual...Ch. 5 - Sales-related and purchase-related transactions...Ch. 5 - Sales-related and purchase-related transactions...Ch. 5 - Multiple-step income statement and balance sheet...Ch. 5 - Single-step income statement and balance sheet...Ch. 5 - Prob. 5.7APRCh. 5 - Appendix Sales-related and purchase-related...Ch. 5 - Appendix Sales-related and purchase-related...Ch. 5 - Prob. 5.10APRCh. 5 - Purchase-related transactions using perpetual...Ch. 5 - Sales-related transactions using perpetual...Ch. 5 - Sales-related and purchase-related transactions...Ch. 5 - Sales-related and purchase-related transactions...Ch. 5 - Multiple-step income statement and balance sheet...Ch. 5 - Prob. 5.6BPRCh. 5 - Prob. 5.7BPRCh. 5 - Prob. 5.8BPRCh. 5 - Prob. 5.9BPRCh. 5 - Appendix Periodic inventory accounts,...Ch. 5 - Palisade Creek Co. is a merchandising business...Ch. 5 - Continuing Company Analysis-Amazon: Asset turnover...Ch. 5 - Home Depot: Asset turnover ratio The Home Depot...Ch. 5 - Kroger: Asset turnover ratio The Kroger Company, a...Ch. 5 - J. C. Penney: Asset turnover ratio J. C. Penney...Ch. 5 - Prob. 5.1TIFCh. 5 - Communication Suzi Nomro operates Watercraft...
Knowledge Booster
Similar questions
- Shital Industries has a standard cost system in which it applies manufacturing overhead to products on the basis of standard machine-hours (MHs) at $6.50 per MH. During the month, the actual total variable manufacturing overhead was $39,600, and the actual level of activity for the period was 6,200 MHs. What was the variable overhead rate variance for the month?helparrow_forwardPasadena Candle Incarrow_forwardFinancial Accountingarrow_forward
- Do fast this question answer general Accountingarrow_forwardAxay Corporation had an average days sales outstanding (DSO) period of 22 days in 2022. An analyst predicts that Axay’s DSO will decline in 2023 (due to expected improvements in the company's collections process) to match the industry average of 18 days. Total sales (all on credit) in 2022 were $350 million, and Axay expects total credit sales to increase to $380 million in 2023. To achieve the lower DSO, the change in the average accounts receivable balance from 2022 to 2023 that must occur is closest to: a) -$3.90 million b) -$2.36 million c) $2.85 million d) $3.90 million provide answerarrow_forwardHow much overhead should be applied to job no B12 ?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Corporate Financial AccountingAccountingISBN:9781305653535Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage LearningCollege Accounting (Book Only): A Career ApproachAccountingISBN:9781337280570Author:Scott, Cathy J.Publisher:South-Western College PubPrinciples of Cost AccountingAccountingISBN:9781305087408Author:Edward J. Vanderbeck, Maria R. MitchellPublisher:Cengage Learning
- Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax CollegeManagerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub

Corporate Financial Accounting
Accounting
ISBN:9781305653535
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning

College Accounting (Book Only): A Career Approach
Accounting
ISBN:9781337280570
Author:Scott, Cathy J.
Publisher:South-Western College Pub

Principles of Cost Accounting
Accounting
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College

Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub