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 differences.

Question

Quizplus · Accepted Answer

Merchandising companies typically have a longer operating cycle because they need to purchase inventory, sell it, and then collect payment, whereas service enterprises primarily provide services and collect payment, which usually involves a shorter cycle.

What Is a Difference Between Merchandising Companies and Service Enterprises