Accounting › Section E · Merchandising transactions › Topic E.1
Merchandising versus service businesses
A consulting firm sells its people's time; a kitchen shop sells blenders it bought from someone else. That one difference, owning goods for resale, adds new accounts, a longer cash cycle and a new line on the income statement: the cost of the goods sold.
In this topic
- Two ways to earn revenue
- Two operating cycles
- New accounts for a merchandiser
- The language of purchases
- The language of sales
- Two income statements
- Worked example: a service firm beside a merchandiser
- Worked example: reading Brackenhill's margins
- Common mistakes to avoid
- Key takeaways
This topic is part of Wuanberri Pro. Checking your access…