Question 1

Markdowns,employee discounts,and stock shortages are examples of _____.

Accepted Answer

A) LIFO accounting entries 
B) pilferage 
C) deductions from retail value 
D) entries in the cost method of accounting 
A) LIFO accounting entries 
B) pilferage 
C) deductions from retail value 
D) entries in the cost method of accounting C

Question 2

A major advantage to the retail method of accounting is the _____.

Accepted Answer

A) ease of bookkeeping 
B) accuracy of the cost complement figure 
C) ability to prepare a profit-and-loss statement on the basis of book inventory figures 
D) freedom from even having to take a physical inventory 
A) ease of bookkeeping 
B) accuracy of the cost complement figure 
C) ability to prepare a profit-and-loss statement on the basis of book inventory figures 
D) freedom from even having to take a physical inventory C

Question 3

A book department has $400,000 in yearly operating expenses and planned yearly sales of $4,800,000.If reductions of $55,000 are anticipated and a profit goal of $500,000 is planned,its required initial markup should be 19.7 percent.

Accepted Answer

A) True 
 B)False  True

Question 4

Holding costs include _____.

Accepted Answer

A) computer time 
B) inventory investment costs 
C) purchase order costs 
D) credit verification costs 
A) computer time 
B) inventory investment costs 
C) purchase order costs 
D) credit verification costs

Question 5

Beginning inventory + purchases + transportation charges equals the _____.

Accepted Answer

A) gross profit 
B) cost of goods sold 
C) cost complement 
D) cost of merchandise available for sale 
A) gross profit 
B) cost of goods sold 
C) cost complement 
D) cost of merchandise available for sale

Question 6

A jeweler plans June sales to be $67,000 and planned reductions to be 15 percent of sales.If planned July 1 inventory is $225,000 (at retail)and the June 1 inventory (at retail)is $260,000,planned purchases (at retail)are $32,000.

Accepted Answer

A) True 
 B)False

Question 7

Under the FIFO accounting method,it is assumed that old stock is sold last and the new stock remains on the shelves.

Accepted Answer

A) True 
 B)False

Question 8

A major advantage of the retail method of accounting is that _____.

Accepted Answer

A) costs do not have to be decoded 
B) a physical inventory is required to prepare an operating statement 
C) frequent operating statements are not possible or necessary 
D) no adjustments to inventory values need be recorded 
A) costs do not have to be decoded 
B) a physical inventory is required to prepare an operating statement 
C) frequent operating statements are not possible or necessary 
D) no adjustments to inventory values need be recorded

Question 9

Safety stock reduces stockouts since it anticipates variability in usage rates and lead times.

Accepted Answer

A) True 
 B)False

Question 10

The economic order quantity formula balances gross profitability,expected sales,and probability of stockouts.

Accepted Answer

A) True 
 B)False

Question 11

Information from merchandise tags or product labels is recorded directly into in-store computer terminals for immediate data processing in a _____ system.

Accepted Answer

A) point-of-sale 
B) visual inspection 
C) manual perpetual inventory 
D) stock-counting 
A) point-of-sale 
B) visual inspection 
C) manual perpetual inventory 
D) stock-counting

Question 12

A plan that specifies exactly which products (goods and services)are purchased,when products are purchased,and how many products are purchased is a _____ plan.

Accepted Answer

A) unit control 
B) dollar control 
C) never-out 
D) financial merchandise 
A) unit control 
B) dollar control 
C) never-out 
D) financial merchandise

Question 13

A retailer plans retail expenses for the following year to be 30 percent of net sales,desires a 5 percent (of net sales)profit margin,and assumes total reductions will be 8 percent of net sales.What is its required initial markup percentage?

Accepted Answer

A) 35.0 
B) 39.8 
C) 43.0 
D) The answer cannot be determined from the information provided. 
A) 35.0 
B) 39.8 
C) 43.0 
D) The answer cannot be determined from the information provided.

Question 14

A furniture retailer has a beginning-of-year inventory (at cost)of $400,000;ending inventory (at cost)is $270,000.Yearly purchases are $700,000 and transportation charges equal $5,700.The retailer's cost of goods sold is _____.

Accepted Answer

A) $570,000 
B) $575,700 
C) $835,700 
D) $1,105,700 
A) $570,000 
B) $575,700 
C) $835,700 
D) $1,105,700

Question 15

A major advantage of the open-to-buy concept is that it _____.

Accepted Answer

A) underestimates demand 
B) limits foreign sales 
C) seeks to balance stock on hand and planned sales 
D) controls stock shortages 
A) underestimates demand 
B) limits foreign sales 
C) seeks to balance stock on hand and planned sales 
D) controls stock shortages

Question 16

The cost of merchandise available for sale minus the value of ending inventory at cost equals the _____.

Accepted Answer

A) gross profit 
B) cost of goods sold 
C) beginning inventory 
D) open-to-buy 
A) gross profit 
B) cost of goods sold 
C) beginning inventory 
D) open-to-buy

Question 17

A retailer's average monthly sales are $50,000.If January's monthly sales are $60,000,January's sales index is 110.

Accepted Answer

A) True 
 B)False

Question 18

What accounting method gives retailers a tax advantage when inventory values are rising?

Accepted Answer

A) cost method of accounting 
B) retail method of accounting 
C) LIFO 
D) FIFO 
A) cost method of accounting 
B) retail method of accounting 
C) LIFO 
D) FIFO

Question 19

If a retailer's average monthly sales are $253,000,what would its average monthly sales index equal?

Accepted Answer

A) .25 
B) 100 
C) 253 
D) The answer cannot be determined from the information provided. 
A) .25 
B) 100 
C) 253 
D) The answer cannot be determined from the information provided.

Question 20

Under which method is it assumed that old stock is sold first and that new stock remains on the shelves?

Accepted Answer

A) FIFO 
B) retail method of accounting 
C) LIFO 
D) cost method of accounting 
A) FIFO 
B) retail method of accounting 
C) LIFO 
D) cost method of accounting

Markdowns,employee discounts,and stock shortages are examples of _____.

A major advantage to the retail method of accounting is the _____.

A book department has $400,000 in yearly operating expenses and planned yearly sales of $4,800,000.If reductions of $55,000 are anticipated and a profit goal of $500,000 is planned,its required initial markup should be 19.7 percent.

Holding costs include _____.

Beginning inventory + purchases + transportation charges equals the _____.

A jeweler plans June sales to be $67,000 and planned reductions to be 15 percent of sales.If planned July 1 inventory is $225,000 (at retail)and the June 1 inventory (at retail)is $260,000,planned purchases (at retail)are $32,000.

Under the FIFO accounting method,it is assumed that old stock is sold last and the new stock remains on the shelves.

A major advantage of the retail method of accounting is that _____.

Safety stock reduces stockouts since it anticipates variability in usage rates and lead times.

The economic order quantity formula balances gross profitability,expected sales,and probability of stockouts.

Information from merchandise tags or product labels is recorded directly into in-store computer terminals for immediate data processing in a _____ system.

A plan that specifies exactly which products (goods and services)are purchased,when products are purchased,and how many products are purchased is a _____ plan.

A retailer plans retail expenses for the following year to be 30 percent of net sales,desires a 5 percent (of net sales)profit margin,and assumes total reductions will be 8 percent of net sales.What is its required initial markup percentage?

A furniture retailer has a beginning-of-year inventory (at cost)of $400,000;ending inventory (at cost)is $270,000.Yearly purchases are $700,000 and transportation charges equal $5,700.The retailer's cost of goods sold is _____.

A major advantage of the open-to-buy concept is that it _____.

The cost of merchandise available for sale minus the value of ending inventory at cost equals the _____.

A retailer's average monthly sales are $50,000.If January's monthly sales are $60,000,January's sales index is 110.

What accounting method gives retailers a tax advantage when inventory values are rising?

If a retailer's average monthly sales are $253,000,what would its average monthly sales index equal?

Under which method is it assumed that old stock is sold first and that new stock remains on the shelves?

An Introduction to Retailing

Building and Sustaining Relationships in Retailing

Strategic Planning in Retailing

Retail Institutions by Ownership

Retail Institutions by Store-Based Strategy

Web, Nonstore-Based, and Other Forms of Nontraditional Retailing

Identifying and Understanding Consumers

Information Gathering and Processing in Retailing

Trading-Area Analysis

Site Selection

Retail Organization and Human Resource Management

Operations Management: Financial Dimensions

Operations Management: Operational Dimensions

Developing Merchandise Plans

Implementing Merchandise

Pricing in Retailing

Establishing and Maintaining a Retail Image

Promotional Strategy

Integrating and Controlling the Retail Strategy

Filters

Exam 16: Financial Merchandise Management

Markdowns,employee discounts,and stock shortages are examples of _____.

A major advantage to the retail method of accounting is the _____.

A book department has $400,000 in yearly operating expenses and planned yearly sales of $4,800,000.If reductions of $55,000 are anticipated and a profit goal of $500,000 is planned,its required initial markup should be 19.7 percent.

Holding costs include _____.

Beginning inventory + purchases + transportation charges equals the _____.

A jeweler plans June sales to be $67,000 and planned reductions to be 15 percent of sales.If planned July 1 inventory is $225,000 (at retail)and the June 1 inventory (at retail)is $260,000,planned purchases (at retail)are $32,000.

Under the FIFO accounting method,it is assumed that old stock is sold last and the new stock remains on the shelves.

A major advantage of the retail method of accounting is that _____.

Safety stock reduces stockouts since it anticipates variability in usage rates and lead times.

The economic order quantity formula balances gross profitability,expected sales,and probability of stockouts.

Information from merchandise tags or product labels is recorded directly into in-store computer terminals for immediate data processing in a _____ system.

A plan that specifies exactly which products (goods and services)are purchased,when products are purchased,and how many products are purchased is a _____ plan.

A retailer plans retail expenses for the following year to be 30 percent of net sales,desires a 5 percent (of net sales)profit margin,and assumes total reductions will be 8 percent of net sales.What is its required initial markup percentage?

A furniture retailer has a beginning-of-year inventory (at cost)of $400,000;ending inventory (at cost)is $270,000.Yearly purchases are $700,000 and transportation charges equal $5,700.The retailer's cost of goods sold is _____.

A major advantage of the open-to-buy concept is that it _____.

The cost of merchandise available for sale minus the value of ending inventory at cost equals the _____.

A retailer's average monthly sales are $50,000.If January's monthly sales are $60,000,January's sales index is 110.

What accounting method gives retailers a tax advantage when inventory values are rising?

If a retailer's average monthly sales are $253,000,what would its average monthly sales index equal?

Under which method is it assumed that old stock is sold first and that new stock remains on the shelves?

An Introduction to Retailing

Building and Sustaining Relationships in Retailing

Strategic Planning in Retailing

Retail Institutions by Ownership

Retail Institutions by Store-Based Strategy

Web, Nonstore-Based, and Other Forms of Nontraditional Retailing

Identifying and Understanding Consumers

Information Gathering and Processing in Retailing

Trading-Area Analysis

Site Selection

Retail Organization and Human Resource Management

Operations Management: Financial Dimensions

Operations Management: Operational Dimensions

Developing Merchandise Plans

Implementing Merchandise

Pricing in Retailing

Establishing and Maintaining a Retail Image

Promotional Strategy

Integrating and Controlling the Retail Strategy

Filters