The major difference between the balance sheets of a service company and a merchandising company is inventory.

Balance Sheets

Financial statements that summarize a company's financial position at a specific point in time, detailing assets, liabilities, and shareholders' equity.

Service Company

A company that provides services to customers as its primary business operations, rather than selling tangible goods.

Inventory

Materials and products that a company holds for the ultimate goal of resale or utilization in production.