What Is the Sub-Prime Market

question 49

Essay

What is the sub-prime market?

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Definitions:

Net Markdowns

The total decrease in the original selling prices of products, accounting for promotions or clearance sales, minus any markdown cancellations.

Periodic Inventory System

An inventory accounting system where the inventory balance is updated and the cost of goods sold is calculated only at the end of each accounting period.

Merchandise Purchases

The acquisition of goods for resale at a profit, a central activity of retail and wholesale businesses.

Lower of Average Cost or Market

An inventory valuation method where inventory is valued at either its average cost or market value, whichever is lower.