To compute inventory on a lower-of-cost or market basis using the retail inventory method:
A) Markups are excluded in the computation of the cost ratio.
B) Markups and markdowns are included in the computation of the cost ratio.
C) Markups and markdowns are excluded in the computation of the cost ratio.
D) Markdowns are excluded in the computation of the cost ratio.

Question

Quizplus · Accepted Answer

Markdowns are excluded in the computation of the cost ratio when using the lower-of-cost-or-market basis in the retail inventory method.

To Compute Inventory on a Lower-Of-Cost or Market Basis Using