Notes This preview shows page 8 - 11 out of 53 pages. 15.When the conventional retail method includes both net markups and net markdowns in thecost-to-retail ratio, it approximates a lower-of-cost-or-market valuation.16.A markup cancellation can exceed the original markup but a markdown cancellationcannot exceed the original markdown. We have textbook solutions for you! The document you are viewing contains questions related to this textbook. Expert Verified Inventories: Additional Valuation Issues9 - 917.In the retail inventory method, abnormal shortages are deducted from both the cost andretail amounts and reported as a loss.18.The inventory turnover ratio is computed by dividing the cost of goods sold by the endinginventory on hand.19.The average days to sell inventory represents the average number of days’ sales forwhich a company has inventory on hand.*20.The LIFO retail method assumes that markups and markdowns apply only to the goodspurchased during the period.—Conceptual Get answer to your question and much more ItemAns.ItemAns.ItemAns.ItemAns.1.T6.T11.F16.F2.F7.T12.T17.T3.F8.F13.F18.F4.T9.F14.T19.T5.F10.T15.F20.TMULTIPLE CHOICE—Conceptual21.Which of the following is true about lower-of-cost-or-market? Get answer to your question and much more 22.Which of the following accounts is credited in the loss method of writing-down of inventoryto its market value? Get answer to your question and much more 23.When valuing raw materials inventory at lower-of-cost-or-market, what is the meaning ofthe term "market"?a. Net realizable valueb.Net realizable value less a normal profit marginc. Current replacement costd. Discounted present value Test Bank for Intermediate Accounting, Fifteenth Edition9 - 1024.In no case can "market" in the lower-of-cost-or-market rule be more than Get answer to your question and much more Upload your study docs or become a Course Hero member to access this document Upload your study docs or become a Course Hero member to access this document End of preview. Want to read all 53 pages? Upload your study docs or become a Course Hero member to access this document Tags net realizable value, retail inventory We have textbook solutions for you!The document you are viewing contains questions related to this textbook. The document you are viewing contains questions related to this textbook. Expert Verified When the conventional retail method includes?The first method, called the conventional retail method includes markups but excludes markdowns. This method results in a lower ending inventory value. The second method, simply called the retail method, uses both markups and markdowns to calculate the ratio. This method results in a higher-ending inventory value.
What is the effect of net markups on the cost retail ratio when using the conventional retail method?What is the effect of net markups on the cost-retail ratio when using the conventional retail method? No effect on the cost-to-retail ratio.
What is included in the costThe conventional retail inventory method includes both net markups and net markdowns to calculate the cost-to-retail ratio.
Why are markdowns excluded from the costWhy are markdowns excluded from the cost-to-retail ratio in the lower-of-cost-or-market method? Markdowns are considered a current loss under the lower-of-cost-or-market method.
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When the conventional retail method includes both net markups and net markdowns in the cost to retail ratio it approximates a lower
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