Which of the Following Is Not a Reason the Retail

question 45

Multiple Choice

Which of the following is not a reason the retail inventory method is used widely?

• A) As a control measure in determining inventory shortages
• B) For insurance information
• C) To permit the computation of net income without a physical count of inventory
• D) To defer income tax liability

---

Definitions:

Ownership Interest

A legal right or stake in property, indicating the owner's claim to control and benefit from it.

Articles of Incorporation

Legal documents filed with a governmental body to legally document the creation of a corporation.

Capital Surplus

Excess amount received by a company over the par value of its stock, representing additional paid-in capital.

Earned Surplus

The portion of a company's net income that is retained for reinvestment, rather than being distributed as dividends to shareholders.