Part1)Pleaserespondtothe following:
Distinguishbetween the income statement of a service company and a merchandisingcompany. Identify at least two critical items of a multistep incomestatement of a merchandising company that are useful to creditors.Provide a rationale for your response.
Part 2) Be sure to respond to your classmate’s (Kristen Jones) post below:
Hello class,
Distinguish between the income statement of a service company and a merchandising company.Amerchandising company’s income statement will list the “cost of goodssold” as where a service company’s income statement will not list the”cost of goods sold” because a service company does not keep inventory. Identify at least two critical items of a multistep income statement of a merchandising company that are useful to creditors.Thecritical items of a multistep income statement of a merchandisingcompany are cost of goods sold, expenses, and revenue. These are themost important items because all three items are used to calculate thecompany’s net income.
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