A Major Advantage of the Retail Inventory Method Is That

question 5

Multiple Choice

A major advantage of the retail inventory method is that it

• A) provides reliable results in cases where the distribution of items in the inventory is different from that of items sold during the period.
• B) hides costs from competitors and customers.
• C) gives a more accurate statement of inventory costs than other methods.
• D) provides a method for inventory control and facilitates determination of the periodic inventory for certain types of companies.

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Definitions:

Social Security

A government program that provides financial benefits to retirees, disabled workers, and their families.

Current Liability

A company's debts or obligations that are due within one year or within the normal operating cycle.

Accounts Payable

Liabilities or amounts owed by a company to suppliers or creditors for goods and services received but not yet paid for.

Accrued Liabilities

Expenses that have been incurred but not yet paid or recorded through a standard accounting transaction, representing future cash outflows.