Which statement is not correct about the retail inventory method?
A)It is an alternative to using a cost flow assumption.
B)It is acceptable for annual financial reporting in Canada.
C)It should only be used if reliable information is available about profit margins.
D)It is a method that estimates ending inventory by applying an average sales margin.

Question

Quizplus · Accepted Answer

The retail inventory method is not acceptable for annual financial reporting in Canada as it does not conform to the requirements of the International Financial Reporting Standards (IFRS) or Canadian Accounting Standards for Private Enterprises (ASPE).

Which Statement Is Not Correct About the Retail Inventory Method