When the Conventional Retail Inventory Method Is Used, Markdowns Are

question 130

Multiple Choice

When the conventional retail inventory method is used, markdowns are commonly ignored in the computation of the cost to retail ratio because

• A) there may be no markdowns in a given year.
• B) this tends to give a better approximation of the lower of cost or market.
• C) markups are also ignored.
• D) this tends to result in the showing of a normal profit margin in a period when no markdown goods have been sold.

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