Which of the Following Statements Does Not Describe a Benefit

question 4

Multiple Choice

Which of the following statements does not describe a benefit of markdowns for a retailer?

• A) Markdowns generate cash flow to pay for new merchandise.
• B) It is a way to make room for new merchandise.
• C) It rids the store of obsolete merchandise.
• D) It increases customer traffic.
• E) It is a way to gain a higher gross margin.

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Definitions:

Conceptual Framework

A system of ideas and objectives that guides the development of standards and practices in financial reporting and accounting.

Financial Reporting

Financial reporting involves the disclosure of financial information to various stakeholders about the financial performance and position of an organization over a specific period of time.

Measurement

The process of quantifying qualitative financial data in monetary terms through various accounting methods.

Going Concern Assumption

The assumption that the entity will continue to operate for the foreseeable future.