Which Statement Best Explains the Difference Between the Retail Inventory

question 20

Multiple Choice

Which statement best explains the difference between the retail inventory and gross margin methods?

• A)The gross margin method estimates cost of goods sold by applying an average gross margin to the amount of sales recorded for the period.
• B)The gross margin method estimates ending inventory cost using retail prices and an average gross margin.
• C)The retail inventory method estimates cost of goods sold by applying an average gross margin to the amount of sales recorded for the period.
• D)The retail inventory method estimates ending inventory cost using purchase prices and an average gross margin.

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Definitions:

Reactive

A response or behavior that occurs as a direct result of stimuli or situations, often implying a lack of proactive planning or initiative.

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The use of internet-based platforms to connect, share, and interact with others.

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A viewpoint that considers employees as assets whose value can be enhanced through investment in education, training, and development.

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