Asked by Anthony Amaya on Jun 28, 2024
Verified
Under the retail inventory method the estimated cost of ending inventory is computed by multiplying the cost-to-retail ratio by
A) net sales.
B) goods available for sale at retail.
C) goods purchased at retail.
D) ending inventory at retail.
Retail Inventory Method
An accounting method used by retailers to estimate their ending inventory balances by applying a cost-to-retail price ratio to the retail value of the inventory.
Cost-to-retail Ratio
A method used to estimate the value of ending inventory based on the ratio of the cost of goods available for sale to the retail price of those goods.
Ending Inventory
The worth of products ready for sale at the close of an accounting cycle, determined by adding the initial inventory and purchases, then subtracting the cost of goods sold.
- Evaluate the consequences of various inventory valuation approaches on financial statements and their tax-related repercussions.
Verified Answer
Learning Objectives
- Evaluate the consequences of various inventory valuation approaches on financial statements and their tax-related repercussions.
Related questions
In a Period of Inflation the Cost Flow Method That ...
Which Costing Method Cannot Be Used to Determine the Cost ...
In a Period of Rising Prices FIFO Will Have ...
When Inventory Costs Are Declining,explain the Impact to the Balance ...
The Company's Inventory Manager Receives Compensation That Includes a Bonus ...