If the Net Markdowns Are Excluded from the Calculation of the Cost-To-Retail

question 58

Multiple Choice

If the net markdowns are excluded from the calculation of the cost-to-retail ratio in the retail inventory method, what is the effect on the cost-to-retail ratio?

• A) The denominator of the ratio will be lower, which results in a higher cost-to-retail ratio.
• B) The denominator of the ratio will be higher, which results in a lower cost-to-retail ratio.
• C) The numerator of the ratio will be higher, which results in a higher cost-to-retail ratio.
• D) The numerator of the ratio will be lower, which results in a lower cost-to-retail ratio.

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Definitions:

Injunction

A legal order by a court that requires a party to do, or refrain from doing, certain acts.

Nuisance

An act, condition, or thing that is illegal because it interferes with the rights of others, specifically in terms of their comfort, health, or safety.

Occupiers' Liability Act

Legislation that outlines the duty of care owed by individuals or entities that control land or buildings to those who enter the premises.

Nonfeasance

The failure to perform an act that one has a duty to perform, often resulting in liability.