Which One of the Following Statements Is False Concerning the Retail

question 49

Multiple Choice

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

• A) In arriving at a cost-to-retail ratio, sales discounts are deducted from goods available for sale to determine ending inventory at retail.
• B) Employee discounts are subtracted from goods available for sale to compute ending inventory at retail.
• C) Abnormal inventory spoilage would be subtracted at both cost and retail in the determination of goods available for sale.
• D) Purchase returns and allowances must be subtracted from both the cost and retail value of the purchases.