When the Retail Inventory Method Is Used, Markdowns Are Commonly

question 170

Multiple Choice

When the retail inventory method is used, markdowns are commonly ignored in the computation of the cost to retail ratio because:

• A) mark-ups are also ignored.
• B) this tends to result in the showing of a normal profit margin in a period when no markdown goods have been sold.
• C) there may be no markdowns in a given year.
• D) this tends to give a better approximation of the lower-of-cost or market.

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Definitions:

Efferent

Nerve fibers that convey impulses away from the central nervous system to effectors (muscles or glands), initiating action or movement.

Pyramidal

Relating to a structure in the shape of a pyramid or reminiscent of pyramidal construction, often used in architectural or anatomical contexts.

Electrochemical Communication

The process of transmitting messages between neurons through electrical and chemical signals.

Nervous System

The body’s electrochemical communication circuitry.