The retail method:

A) determines the value of the ending inventory using a cost-to-retail ratio.
B) is often used for interim financial reports.
C) determines the value of the ending inventory using a predetermined gross profit rate.
D) Both A and B are correct.

Retail Method

An accounting technique used to estimate the ending inventory and cost of goods sold by calculating a cost to retail price ratio.

Cost-To-Retail Ratio

A method used to estimate the ending inventory of a business, calculated by dividing the cost of goods available for sale by the retail price of the goods.

Gross Profit Rate

The ratio of gross profit to net sales, used to assess a company's financial health by indicating the efficiency of its production process.