Answer to Question #243711 in Accounting for samantha

Question

9. Differentiate a service, merchandising, and manufacturing entity by providing 2 examples for each type of business.

Answer 1

Solution:

A service entity is a type of business that generates income by providing services to clients rather than selling physical products. Two examples of service industries include accounting firms and law firms.

A merchandising entity is a type of business that purchases finished goods and resells them to consumers. They operate as wholesalers or retailers. Two examples of merchandising entities include Walmart and Target.

A manufacturing entity is a type of business that utilizes parts, components, or raw materials to produce finished goods, which are either sold directly to consumers or to merchandising firms. Two examples of manufacturing entities include General Motors Ltd and General Electric Company.