Asked by Regan Mc Mullan on May 21, 2024
Verified
Use of the retail inventory method requires taking a physical count of inventory.
Retail Inventory Method
An accounting method used by retailers to estimate inventory value by converting retail prices to cost values.
Physical Count of Inventory
The manual process of counting all the physical goods a company has in stock at a specific time.
- Understand thoroughly the vital significance and parts of inventory oversight schemes, including carrying out physical assessments and applying company-specific documents.
Verified Answer
EV
Elliott VenturaMay 22, 2024
Final Answer :
False
Explanation :
The retail inventory method does not require taking a physical count of inventory. It is a formula-based method that estimates the value of inventory by using the ratio of cost-to-retail price multiplied by the current retail price of the inventory. This method is commonly used in retail businesses to track inventory levels and evaluate the cost of goods sold.
Learning Objectives
- Understand thoroughly the vital significance and parts of inventory oversight schemes, including carrying out physical assessments and applying company-specific documents.
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