Question Details

Which statement is true about the retail inventory method 



1.	Which statement is not true about the gross profit method of inventory valuation?
a.	It may be used to estimate inventories for interim statements.
b.	It may be used to estimate inventories for annual statements.
c.	It may be used by auditors.
d.	None of these.

2.	A major advantage of the retail inventory method is that it
a.	provides reliable results in cases where the distribution of items in the inventory is different from that of items sold during the period.
b.	hides costs from competitors and customers.
c.	gives a more accurate statement of inventory costs than other methods.
d.	provides a method for inventory control and facilitates determination of the periodic inventory for certain types of companies.

	3.	An inventory method which is designed to approximate inventory valuation at the lower of cost or net realizable value is
a.	last-in, first-out.
b.	first-in, first-out.
c.	conventional retail method.
d.	specific identification.

	4.	The retail inventory method is based on the assumption that the
a.	final inventory and the total of goods available for sale contain the same proportion of high-cost and low-cost ratio goods.
b.	ratio of gross margin to sales is approximately the same each period.
c.	ratio of cost to retail changes at a constant rate.
d.	proportions of markups and markdowns to selling price are the same.

	5.	Which statement is true about the retail inventory method ?
a.	It may not be used to estimate inventories for interim statements.
b.	It may not be used to estimate inventories for annual statements.
c.	It may not be used by auditors.
d.	None of these.



Business Management Assignment Help, Business Management Homework help, Business Management Study Help, Business Management Course Help