The basic purpose of accounting is to provide primarily qualitative information that the users of an economic entity need.

A retailer of goods is most likely involved in trading or merchandising business.

Luca Pacioli was the inventor of double-entry bookkeeping.

An advantage of a merchandising business over a service business is that the owner need not have an expertise or special skills.

According to accrual basis of accounting, a business should record a sale only when the sale price is collected.

Merchandising entities buy raw materials, convert them into products and then sell the products to other companies or to final consumers.

Since the life of the business is assumed to be indefinite, the financial statement of the business should be prepared only when it goes into liquidation.

A sole proprietor has limited risk with respect to the amount of resources invested in the business

An advantage of a partnership over a sole proprietorship is the ability to raise greater capital.