Accounting for IGCSE & O level - Preparation Of Financial Statements (Section 2 - No. 21)
What is the main difference between a service business and a trading business in terms of financial statements?
Service businesses calculate cost of goods sold.
Trading businesses do not need an income statement.
Trading businesses calculate gross profit.
Service businesses own more assets.
Explanation
Trading businesses calculate gross profit, which service businesses don't typically need to do.
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