Listed below are several terms and phrases associated with inventory measurement. Pair each item
E 9-29 Concepts; terminology. Listed below are several terms and phrases associated with inventory measurement. Pair each item
ANSWER KEY E 9-29 Concepts; terminology
Listed below are several terms and phrases associated with inventory measurement. Pair each item from List A with the item from List B (by letter) that is most appropriately associated with it. .
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| _____ | 1. | Gross profit ratio |
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| a. | Reduction in selling price below the original selling price. |
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| _____ | 2. | Cost-to-retail percentage |
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| b. | Beginning inventory is not included in the calculation of the cost-to-retail percentage. |
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| _____ | 3. | Additional markup |
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| c. | Deducted in the retail column after the calculation of the cost-to-retail percentage. |
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| d. | Requires base year retail to be converted to layer year retail and then to cost. |
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| e. | Gross profit divided by net sales. |
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| _____ | 6. | Retail method, FIFO and LIFO |
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| f. | Material inventory error discovered in a subsequent year. |
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| _____ | 7. | Conventional retail method |
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| g. | Must be deducted with retail column if sales are recorded net of discounts. |
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| _____ | 8. | Change from LIFO |
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| h. | Deducted in the retail column to arrive at goods available for sale at retail. |
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| _____ | 9. | Dollar-value LIFO retail |
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| i. | Divide cost of goods available for sale by goods available at retail. |
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| _____ | 10. | Normal spoilage |
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| _____ | 11. | Requires retrospective restatement |
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| k. | Added to the retail column to arrive at goods available for sale. |
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| _____ | 12. | Employee discounts |
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| l. | Increase in selling price subsequent to initial markup. |
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| m. | Ceiling in the determination of market. |
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| _____ | 14. | Net realizable value |
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| n. | Accounting change requiring retrospective treatment.
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