Which One of the Following Statements Is Not True Concerning

question 23

Multiple Choice

Which one of the following statements is not true concerning the retail inventory method?

• A)In arriving at a cost-to-retail ratio, sales discounts are deducted from goods available for sale to determine ending inventory at retail.
• B)Employee discounts are subtracted from goods available for sale to compute ending inventory at retail.
• C)Abnormal inventory spoilage would be subtracted at both cost and retail in the determination of goods available for sale.
• D)Purchase returns and allowances must be subtracted from both the cost and retail value of the purchases.