the steps in the accounting cycle for a merchandising company are different from those in the accounting cycle for service enterprise

Question

do you agree or disagree?

Answer 1

Agree. In a merchandising company there is cost accounting of a tangible product and there is cost of good sold, inventory, restocking and depletion of inventory. there is also year end inventory taking and assigning a value based on its FMV at end of year. There is a production cycle to deal with. 

 

In a service enterprise, the sale item is selling of services and the issue of tangible inventory doesn't exist