Manufacturing and Merchandising Companies are recognized revenues when they sell inventory to customers.
Merchandising company
A merchandising company buys tangible goods and resells them to consumers. These businesses incur costs, such as labor and material, to present and sell products . The operating cycle of merchandising company is the time between the purchase of the product and sale of the company.
Manufacturing company
A manufacturer is a person or company that produces finished goods from raw materials by using various tools, equipment , and then sells the goods to consumers, wholesalers, distributors, for the production of more complex goods.
Merchandising companies hold and account for product inventory , which makes their income statement inherently more complicated. The nature of increase or decreases in net revenue for each type of company is also different.
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