A company uses the conventional retail method to estimate the cost of ending inventory for interim financial statements. Which of the following responses describe the correct treatment of markups and markup cancellations in the calculation of the cost-to-retail ratio?
A)
Markups
Markup Cancellations
add
subtract
B)
Markups
Markup Cancellations
add
exclude
C)
Markups
Markup Cancellations
add
add
D)
Markups
Markup Cancellations
subtract
exclude
Answer: A
Business
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