Mr. McKenzie has prepared the following list of statements about service companies and merchandisers.

1. Measuring net income for a merchandiser is conceptually the same as for a service company.

2. For a merchandiser, sales less operating expenses is called gross profit.

3. For a merchandiser, the primary source of revenues is the sale of inventory.

4. Sales salaries and wages is an example of an operating expense.

5. The operating cycle of a merchandiser is the same as that of a service company.

6. In a perpetual inventory system, no detailed inventory records of goods on hand are maintained.

7. In a periodic inventory system, the cost of goods sold is determined only at the end of the accounting period.

8. A periodic inventory system provides better control over inventories than a perpetual system.

Identify each statement as true or false. If false, indicate how to correct the statement.