Merchandising companies do not calculate the raw materials placed in production or cost
of goods manufactured.
Merchandisers purchase goods from suppliers instead of manufacturing goods. The cost
of these purchases from suppliers is often called net purchases in the income statement, in
contrast to cost of goods manufactured in a manufacturer’s income statement. The net
purchases line consists of purchases, purchases returns and allowances, purchases
discounts, and freight in.
Merchandisers do not use the schedule of cost of goods manufactured (and related
schedule of raw materials placed in production).
Merchandisers use an account called merchandise inventory, or simply inventory, instead
of finished goods inventory. This reflects that merchandisers do not produce goods.
A traditional income statement would differ depending on whether a business was service-oriented, merchandiser or manufacturer. The manufacturing company transforms raw material into finished goods through the use of labor and factory facilities and a merchandising company, such as a retail furniture store which buys finished furniture and sells it in the same form i.e. sells the goods it buys without changing the basic form. The income statement which is prepared by a merchandising concern needs no calculations of cost of goods manufactured. But the income statements prepared by the manufacturing concern require the calculations for the cost of goods manufactured. So the financial statements prepared by a manufacturing company are more complex than the statements prepared by a merchandising company. The manufacturer company involves many costs that the merchandisers do not have. It is clear that the manufacturing company will have a more complex and varied cost components vs. a merchandiser and a service organization.
In merchandising company income statement there is no detailed cost of goods sold statement is prepared while in manufacturing company income statement detailed cost of goods sold statement is prepared.
what are the major differences in preparing the financial statements for a service business and a merchandising business?
Ans: Merchandising is selling and purchasing while manufacturing means making.
Both statements are difference in this way that in merchandising income statement there is only one purchases items while in manufacturing income statement there is complete manufacturing account is also prepared to show manufacturing process as well.
difference between services enterprise and merchandising enreprise and manufacturing enterprise
list & describe the 3 form of business? describe each of the 3 types (service, merchandising & manufacturing) of business operation? Explain the difference between manufacturing & merchandising?
Manufacturing companies focus on converting raw material into marketable products while merchandising companies focus on buying the finished product from the manufacturers
what is the diference between merchandising and retailing
list & describe the 3 form of business? describe each of the 3 types (service, merchandising & manufacturing) of business operation? Explain the difference between manufacturing & merchandising?
Manufacturing account, on the other hand, is a financial statement which shows production costs
Let me give you my little understanding about his two subjects. Merchandising is also called merchandise planning while visual merchandising is the art of implementing effective design ideas.
difference between command and statement
A descriptive statement simply describes a situation or phenomenon, while an explanatory statement seeks to provide reasons or causes for why something is the way it is. Descriptive statements focus on providing details and observations, while explanatory statements aim to offer insight and understanding.
servic provides merchindiezing sells
manufacturing process of steel plates difference between heat and product analysis ?