When the Conventional Retail Inventory Method Is Used, Markdowns Are

question 18

Multiple Choice

When the conventional retail inventory method is used, markdowns are commonly ignored in the calculation 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 and market.
• C)markups are also ignored.
• D)this tends to result in showing a normal profit margin in a period when no markdown goods have been sold.

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