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 these choices are differences.

Question

Quizplus · Accepted Answer

Merchandising companies typically have a longer operating cycle because they need to purchase and manage inventory before selling it, whereas service enterprises primarily provide services without the need for inventory.

What Is a Difference Between Merchandising Companies and Service Enterprises