Accounting Fundamentals Certification (AFC) Practice Test 2026 – The Comprehensive All-in-One Guide to Exam Success!

A merchandising business is specifically characterized by its operation of buying finished products from manufacturers or wholesalers and then reselling them to customers. This model does not involve the production process; rather, it focuses on the retailing aspect of the supply chain. Merchandising businesses can include various retail operations, such as grocery stores, clothing shops, and online retailers, which procure goods in bulk and offer them to consumers at retail prices.

Choices that describe manufacturing businesses or service-oriented operations do not align with the fundamental definition of a merchandising business. For instance, businesses that engage in manufacturing create products to sell, while those that primarily offer services do not hold physical inventory for resale. Similarly, investment-focused enterprises are unrelated to the direct buying and selling of tangible goods and thus fall outside the scope of what defines a merchandising business.