When a merchandising business is compared to a service business, the financial statement that is affected by that change is the retained earnings statement.

Question

Quizplus · Accepted Answer

The retained earnings statement is affected by the change because it shows the cumulative net income or loss of the business over time. When a merchandising business is compared to a service business, the net income or loss will be different due to the different types of expenses and revenues that each type of business incurs.

When a Merchandising Business Is Compared to a Service Business