All three types of companies need to determine the costs of product or services to
A final, very important function of managerial accounting is to develop plans and policies to ensure internal control and that company objectives are accomplished (control). Standard Costing System
Inventory Accounts for Manufacturing Companies
Income Statement Comparison Merchandising versus Manufacturing Company The income statement of a manufacturing company is identical to that of a merchandising company. The difference between the two types of companies lies in the Determination of cost of goods sold
Balance Sheet Statement Comparison Merchandising versus Manufacturing Company Which financial statement is most different when comparing service and merchandising businesses?Even though merchandising companies and service companies conform to generally accepted accounting principles (GAAP), there are differences in the ways each prepares its financial statements, especially income statements, where most differences center around the existence of inventory.
Is there a difference between merchandising business and service business in the accounting cycle?Service companies sell intangible services and do not have inventory. Their operating cycle begins with cash-on-hand, providing service to customers, and collecting customer payments. Merchandising companies resell goods to consumers.
What is the major difference between the income statement for a merchandising business?What is the major difference between the income statement for a merchandising business and a service business? The cost of merchandise sold section.
What are the financial statements of a merchandiser?There are three calculated amounts on the multi-step income statement for a merchandiser - net sales, gross profit, and net income. Net sales is the actual sales generated by a business. It represents everything that “went out the door” in sales minus all that came back in returns and in the form of sales discounts.
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