When Calculating the Cost Ratio for the Retail Inventory Method

question 149

Multiple Choice

When calculating the cost ratio for the retail inventory method,

• A) if it is the conventional method, the beginning inventory is included and markdowns are deducted.
• B) if it is the LIFO method, the beginning inventory is excluded and markdowns are deducted.
• C) if it is the LIFO method, the beginning inventory is included and markdowns are not deducted.
• D) if it is the conventional method, the beginning inventory is excluded and markdowns are not deducted.

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Definitions:

U.S. GAAP

Generally Accepted Accounting Principles in the United States, a framework of accounting standards, principles, and procedures.

Disclosed

The act of making information known or revealed, often in a financial context.

Operating Segments

Components of a business for which separate financial information is available and is evaluated regularly by the chief operating decision-maker to allocate resources and assess performance.

Disclosed

Disclosed means to make known or reveal information that was previously secret or unknown.