ACC 304 All Assignments ACC 304 All Assignments | Page 128

d. this tends to result in the showing of a normal profit margin in a
period when no markdown goods have been sold.
55. To produce an inventory valuation which approximates the
lower of cost or market using the conventional retail inventory method,
the computation of the ratio of cost to retail should
a. include markups but not markdowns.
b. include markups and markdowns.
c. ignore both markups and markdowns.
d. include markdowns but not markups.
*56.
When calculating the cost ratio for the retail inventory method,
a. if it is the conventional method, the beginning inventory is included
and markdowns are deducted.