2. How would you expect the ratios to differ between a discount supermarket and luxury retailer? A. Discount supermarket would have a lower gross margin B. Discount supermarket would have a higher SGA margin C. Discount supermarket would have lower inventory turnover D. Discount supermarket would have lower ROE

2. How would you expect the ratios to differ between a discount supermarket and luxury retailer? A. Discount supermarket would have a lower gross margin B. Discount supermarket would have a higher SGA margin C. Discount supermarket would have lower inventory turnover D. Discount supermarket would have lower ROE

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter6: Cost Of Goods Sold And Inventory

Section: Chapter Questions

Problem 15DQ: How would reported income differ if LIFO rather than FIFO were used when purchase prices are rising?...

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Similar questions

When purchase prices are rising, which of the following statements is true? a.LIFO produces a higher cost of goods sold than FIFO. b.LIFO produces a higher cost for ending inventory than FIFO. c.FIFO produces a lower amount for net income than LIFO. d.Weighted average cost produces a higher net income than FIFO or LIFO.
If costs are rising, which of the following will be true?a. The cost of goods sold will be greater if LIFO is usedrather than weighted average.b. The cost of ending inventory will be greater if FIFO isused rather than LIFO.c. The gross profit will be greater if FIFO is used ratherthan LIFO.d. All of the above are true
If merchandise inventory is being valued at cost and the purchase price is steadily falling, which method of costing will yield the largest net income? Select one: a. average cost. b. LIFO. c. FIFO. d. weighted average. e. All methods will result in the same figure of net income.
Using the details below, compute for the cost of goods sold using the conservative retail and average cost retail. *
In computing cost ratio, the conservative/conventional retail method should A. Exclude mark-up but not markdown B. Include mark-up and markdown C. Exclude mark-up and markdown D. Include mark-up but not markdown
Identify which of the statements below are true (T) or false (F). Lean businesses aim to: Reduce inventory levels
Th e Industry and Business Risk excerpt states that, “Increased competition may lead tolower unit sales and excess production capacity and excess inventory. Th is may result in afurther downward price pressure.” Th e downward price pressure could lead to inventorythat is valued above current market prices or net realizable value. Any write-downs ofinventory are least likely to have a significant eff ect on the inventory valued using:A. weighted average cost.B. first-in, first-out (FIFO).C. last-in, first-out (LIFO).
Using the following data, how should the merchandise be valued under lower of cost or market?
A firm that uses LIFO accounting for inventory in times of rising investory costs will always report lower profit margins than if it used FIFO. Is this correct?
Which of the following change in regulations is most likely to improve internal market efficiency and thereby overall market efficiency? Reducing margin requirements on short selling. Raising margin requirements on short selling. Raising margin requirements on margin purchases. Reducing trading hours. Increasing margin interest rates.
Which of the following statements regarding the lower of cost and net realizable value (LCNRV) rule is true? a.The LCNRV rule is an application of the cost principle. b.When the net realizable value of inventory drops below the cost of inventory, an adjustment is made to decrease inventory to its net realizable value and decrease income. c.If a company uses the LCNRV rule, there is no need to use a cost flow assumption such as FIFO, or weighted average cost. d.When the net realizable value of inventory is above the cost of inventory, an adjustment is made to increase inventory to its net realizable value and increase income.
How would reported income differ if LIFO rather than FIFO were used when purchase prices are rising? When purchase prices are falling?