With regard to the retail inventory method, which of the following statements is the most accurate?
A. Generally , accountants ignore net markups and net markdowns in computing the cost-price percentage
B. Generally, accountants exclude both net marups and net markdowns in computing cost-price percentage
C. This method results in a lower ending inventory cost if net markups are included but net markdowns are excluded in computing the cost-price percentage
D. It is not adoptable to FIFO existing
Answer: C. This method results in a lower ending inventory cost if net markups are included but net markdowns are excluded in computing the cost-price percentage.
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Retail Inventory Method
- Retail Inventory Method Questions with Answers.
- What is the effect of net markup on the cost-retail ratio when using the conservative retail method?
- What is the effect of freight in on the cost-retail ratio when using the conservative retail method?
- An inventory method which is designed to approximate inventory valuation at the lower of cost and net realizable value is
- What condition is not necessary when using the retail inventory method?
- Which of the following is not required when using the retail inventory method?
- Which of the following is not a reason the retail inventory method is used widely?
- The retail method is based on the assumption that
- Which one of the following would cause a decrease in the cost ratio as used in the retail inventory method?
- The conventional retail method produces an ending inventory that approximates
- If the conservative retail inventory method is used, which of the following calculations would include or exclude net markdowns?
- The retail inventory method would include which of the following in the calculation of the goods available for sale at both cost and retail?
- To produce an inventory valuation which approximates the lower of cost and net realizable value using the retail inventory method, the computation of the ratio of cost to retail should
- When the conventional retail inventory method is used, markdowns are ignored in the computation of the cost to retail ratio because
- A major advantage in the retail inventory method is that it
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