Which of the following assets does a merchandising company-but NOT a service company-need?
A) Accounts receivable
B) Prepaid insurance
C) Merchandise inventory
D) Equipment

Question

Quizplus · Accepted Answer

A merchandising company buys and sells inventory or goods, so it needs merchandise inventory to conduct business. Service companies do not have inventory since they provide intangible services. Accounts receivable and prepaid insurance can be assets for both types of companies. Equipment can also be an asset for a merchandising company if it uses it to handle inventory or distribute goods.

Which of the Following Assets Does a Merchandising Company-But NOT