Final answer:
A merchandiser's Statement of Retained Earnings is not the same as the Statement of Retained Earnings for a service business.
Step-by-step explanation:
False. A merchandiser's Statement of Retained Earnings is not exactly the same as the Statement of Retained Earnings for a service business.
A merchandiser is a business that buys and sells goods for a profit. Their statement of retained earnings would include the net income from buying and selling goods, as well as any dividends paid to shareholders. On the other hand, a service business provides intangible services and their statement of retained earnings would reflect the net income from providing those services.
For example, let's say a merchandiser business had a net income of $100,000 and paid dividends of $20,000. Their statement of retained earnings would show a balance of $80,000. In contrast, a service business with the same net income but no dividends would show a balance of $100,000 on its statement of retained earnings.