Which One of the Following Statements Is False Concerning the Retail

question 124

Multiple Choice

Which one of the following statements is false concerning the retail inventory method?

• A) Net markups and markdowns are always added and subtracted in order to compute the retail value of ending inventory.
• B) Markups and markdowns are recorded only at retail.
• C) In the lower of average cost or market method, net markups are excluded from the computation of the cost- to-retail ratio.
• D) In computing the cost-to-retail ratio, purchase discounts affect only the cost of purchases and not the retail amount of purchases.

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Definitions:

Mutual Funds

Investment programs funded by shareholders that trade in diversified holdings and are managed by professional investment managers.

Dollar-Weighted Return

A method of calculating an investment's return that accounts for the timing and amount of cash flows into and out of the investment.

Time-Weighted Return

A measure of the historical performance of an investment portfolio which adjusts for external flows, such as cash injections or withdrawals.

Sharpe Measure

A metric used to assess the performance of an investment by adjusting for its risk, calculated as the difference between the investment's returns and the risk-free return rate, divided by the investment's standard deviation.