Q5-2RQ - Horngren'S Financial And Managerial Accounting

Question

What are the two types of merchandisers? How do they differ?

Step-by-Step Solution

Answer

The merchandisers are generally classified into categories: Wholesalers and retailers. 

Meaning of Merchandisers

Merchandisers are the business entities or individuals engaged in providing goods to the customers and other business concerns. They are responsible for tracking inventory levels and dealing with the shortage of inventories. 

Types of merchandisers

Merchandisers are often classified into two different categories:

1. Wholesaler: A wholesaler deals with the manufacturers directly.
2. Retailer: A retailer deals with wholesalers. 

Difference between wholesaler and retailer

S. No.	Wholesaler	Retailer
1)	A wholesaler buys merchandise directly from the manufacturers and sells them to retailers.	Retailers buy the merchandise from the wholesalers and sell them to the customers.
2)	Wholesalers generally deal in huge quantities.	Retailers fulfill the daily needs of the customers by providing them required quantity.