Describe the major differences in preparing the financial statements for a service business and a merchandising business.

Service Business

A type of business that primarily offers intangible goods or services to consumers, such as consulting, legal advice, and maintenance services.

Merchandising Business

A type of business that makes profit by buying goods at a wholesale price and selling them at a retail price, primarily dealing in goods rather than services.

Financial Statements

Financial statements are records that provide an overview of a company's financial performance and position, typically including the balance sheet, income statement, and statement of cash flows.