Merchandising Businesses (Accounting) - Explained
What is a Merchandising Business?
Written by J. Mance Gordon
Updated at April 18th, 2024
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What is a Merchandising Businesses?
A merchandising business is a business that generates revenue by selling goods (a product or inventory).
What are the Types of Merchandising Business?
There are two types of merchandising businesses:
- Wholesale company
- Retail company
What is a wholesale company?
A wholesale company sells items in bulk to other businesses.
What is a retail company?
A retail company sells products to the end user or the consumer.
How Do You Account for Inventory in a Merchandising Business?
In a merchandising business, you have another type of account that you have to worry about - inventory. The goods that we sell - those products - are merchandise inventory. Inventory is the account used for products that a company owns and intends to sell.
Related Topics
- What is Merchandising? – Financial Accounting
- Recognizing Inventory Sales – Financial Accounting
- Perpetual vs Period Systems – Financial Accounting
- Special Merchandising Transactions – Financial Accounting
- Adjustments for Inventory – Financial Accounting
- Multi-Step Income Statement – Financial Accounting