Question

What accounts do only merchandising companies have?

If you could include what merchandising accounts all are, and tell which one is only on the merchandising companies?

Answer 1

Merchandising companies have the following accounts – sales revenue, cost of goods sold, operating expenses, depreciation, net income, etc.

Of these accounts the accounts that is unique to merchandising companies is sales discounts and inventory. Besides the income statement of a merchandising company has the unique account heads of sales revenue, cost of goods sold and gross profit.

Unlike manufacturing companies, merchandising companies do not make products but only sell them after buying them from a manufacturing company or a wholesaler. Merchandising companies often sell their wares by offering sale discounts to the buyers with an objective to increase their turnover by encouraging more people to buy.

Inventory is the merchandise that has been purchased for resale purpose.