BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Purchase allowance
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Purchase returns
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Net markdown
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Departmental transfer out
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Detailed explanation-1: -Under the conventional retail inventory method, the cost-to-retail ratio includes the retail price of goods available and: net markups only.
Detailed explanation-2: -This ratio is calculated using the formula: cost-to-retail ratio = [cost of goods available for sale ÷ retail value of goods available for sale] x 100.
Detailed explanation-3: -To find your cost-to-retail percentage, a.k.a. the cost complement percentage, divide the cost of goods sold (how much you paid for the inventory) by the retail prices of those goods (how much you charge customers for those goods). Then, multiple that number by 100 to end up with a percentage.
Detailed explanation-4: -When using the periodic inventory method, which of the following generally would not be separately accounted for in the computation of cost of goods sold? the buyer’s inventory balance.