The Income Statements and Balance Sheets of Service, Retailing, and Manufacturing

question 11

Essay

The income statements and balance sheets of service, retailing, and manufacturing businesses tend to differ.
Required:
A. Which of these businesses will disclose a cost-of-goods-sold figure on the income statement? Why?
B. Briefly describe the difference between a retailing firm and manufacturer's disclosure of inventories on the balance sheet.
A. Retailers and manufacturers will disclose a cost-of-goods-sold figure because both of these entities sell goods. Service businesses, in contrast, do not given that such firms provide services.
A. Which of these businesses will disclose a cost-of-goods-sold figure on the income statement? Why?
B. A retailer will typically disclose inventories as one-line item entitled merchandise inventories. Manufacturers, on the other hand, carry three different types of inventories: raw materials, work in process, and finished goods.
B. Briefly describe the difference between a retailing firm and manufacturer's disclosure of inventories on the balance sheet.

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Definitions:

Cohesive Groups

Social or work groups characterized by a high level of solidarity and unity, where members exhibit strong bonds and mutual support.

Productive

The state of achieving significant results, outcomes, or goods in relation to the amount of time or resources used.

Voluntary Turnover

The act of employees leaving an organization by their own choice rather than being dismissed.

Group Cohesiveness

The extent to which members of a group feel bonded or united toward achieving a common goal.