Question 1

It is important for the retailer to remember that the merchandise budget serves no useful purpose if it cannot be understood by all decision makers.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is an example of a cash outflow?

Accepted Answer

A)  Cash sales 
B)  Taxes 
C)  Collecting accounts receivable 
D)  Collecting notes receivable 
E)  Sale of stock 
A)  Cash sales 
B)  Taxes 
C)  Collecting accounts receivable 
D)  Collecting notes receivable 
E)  Sale of stock

Question 3

When physical inventory value exceeds book inventory value a retailer is said to have:

Accepted Answer

A)  excess profits. 
B)  shortages. 
C)  overages. 
D)  markups. 
E)  inventory gains. 
A)  excess profits. 
B)  shortages. 
C)  overages. 
D)  markups. 
E)  inventory gains.

Question 4

The purpose of the statement of cash flow is to enable a retailer to project the cash needs of the firm.

Accepted Answer

A) True 
 B)False

Question 5

Art's Appliances has accounts payable of $65,000,payroll payable of $2,750,mortgage payable of $38,500,current notes payable of $12,000,and taxes payable of $3,100.Art's current liabilities are:

Accepted Answer

A)  $12,000 
B)  $38,500 
C)  $82,850 
D)  $121,350 
E)  $178,900 
A)  $12,000 
B)  $38,500 
C)  $82,850 
D)  $121,350 
E)  $178,900

Question 6

Angelo's Paints has long-term notes payable of $30,000 and mortgage payable of $60,000.Angelo's long-term liabilities equal $90,000.

Accepted Answer

A) True 
 B)False

Question 7

Joe's Kites is preparing an income statement.Net sales equal $175,000.Returns and allowances equal $16,000.Costs of goods sold equal $95,000.What is Joe's gross margin?

Accepted Answer

A)  $64,000 
B)  $80,000 
C)  $96,000 
D)  $159,000 
E)  $191,000 
A)  $64,000 
B)  $80,000 
C)  $96,000 
D)  $159,000 
E)  $191,000

Question 8

_____ is the cost of merchandise that has been sold during the period.

Accepted Answer

A)  Gross sales 
B)  Operating margin 
C)  Cost of goods sold 
D)  Gross margin 
E)  Net sales 
A)  Gross sales 
B)  Operating margin 
C)  Cost of goods sold 
D)  Gross margin 
E)  Net sales

Question 9

An income statement:

Accepted Answer

A)  shows the estimated cash inflows and outflows for the period. 
B)  gives the retailer a summary of the firm's financial position at a given point in time. 
C)  is usually only prepared when the retailer is seeking to obtain a loan. 
D)  provides a summary of the sales and expenses for a given time period. 
E)  is the only financial statement that shows the retailer's retained earnings. 
A)  shows the estimated cash inflows and outflows for the period. 
B)  gives the retailer a summary of the firm's financial position at a given point in time. 
C)  is usually only prepared when the retailer is seeking to obtain a loan. 
D)  provides a summary of the sales and expenses for a given time period. 
E)  is the only financial statement that shows the retailer's retained earnings.

Question 10

A(n)_____ depicts the amount of stock to have at the beginning of each month to support the forecasted sales for that month.

Accepted Answer

A)  current asset 
B)  BOM inventory 
C)  stock-to-sales ratio 
D)  sales-to-stock ratio 
E)  EOM inventory 
A)  current asset 
B)  BOM inventory 
C)  stock-to-sales ratio 
D)  sales-to-stock ratio 
E)  EOM inventory

Question 11

A retailer can grow quickly and be profitable on its income statement but still face financial problems due to an inadequate cash flow.

Accepted Answer

A) True 
 B)False

Question 12

A retailer is experiencing a negative cash flow when its cash outflows exceed its cash inflows.

Accepted Answer

A) True 
 B)False

Question 13

A stock-to-sales ratio represents the amount of stock a retailer needs to have on hand at the end of the month compared to the sales recorded during the month.

Accepted Answer

A) True 
 B)False

Question 14

_____ is an intangible asset,usually based on customer loyalty that a retailer pays for when buying an existing business.

Accepted Answer

A)  Prepaid expenses 
B)  Cash 
C)  Goodwill 
D)  Inventory 
E)  Accounts payable 
A)  Prepaid expenses 
B)  Cash 
C)  Goodwill 
D)  Inventory 
E)  Accounts payable

Question 15

Net sales are:

Accepted Answer

A)  gross sales less returns and allowances from customers. 
B)  gross sales less cost of goods sold. 
C)  profits less cost of goods sold. 
D)  cost of goods sold less returns and allowances. 
E)  gross margin plus fixed expenses. 
A)  gross sales less returns and allowances from customers. 
B)  gross sales less cost of goods sold. 
C)  profits less cost of goods sold. 
D)  cost of goods sold less returns and allowances. 
E)  gross margin plus fixed expenses.

Question 16

The number one cause of retailing bankruptcies in recent years is cash flow problems.

Accepted Answer

A) True 
 B)False

Question 17

A buyer's planned sales are $80,000,planned initial markup is $60,000 and planned reductions are $7,500.What is the buyer's planned gross margin on the merchandise budget?

Accepted Answer

A)  $52,500 
B)  $72,500 
C)  $60,000 
D)  $67,500 
E)  $87,500 
A)  $52,500 
B)  $72,500 
C)  $60,000 
D)  $67,500 
E)  $87,500

Question 18

Explain the five major merchandising decisions that a retailer must make when developing the merchandise budget.Why is a merchandising budget so important?

Accepted Answer

In developing the merchandise budget,the

Question 19

Your have just calculated the cost complement.Under the retail method of inventory valuation,what do you do next?

Accepted Answer

A)  Determine planned sales 
B)  Calculate reductions from retail value 
C)  Convert adjusted retail book inventory to cost 
D)  Determine planned purchases at cost 
E)  Determine the cost complement's inverse 
A)  Determine planned sales 
B)  Calculate reductions from retail value 
C)  Convert adjusted retail book inventory to cost 
D)  Determine planned purchases at cost 
E)  Determine the cost complement's inverse

Question 20

Depreciation is necessary because most noncurrent assets have a limited useful life; the difference between the asset and depreciation is intended to provide a more realistic picture of the retailer's assets and prevent an overstatement or understatement of these assets.

Accepted Answer

A) True 
 B)False

It is important for the retailer to remember that the merchandise budget serves no useful purpose if it cannot be understood by all decision makers.

Which of the following is an example of a cash outflow?

When physical inventory value exceeds book inventory value a retailer is said to have:

The purpose of the statement of cash flow is to enable a retailer to project the cash needs of the firm.

Art's Appliances has accounts payable of $65,000,payroll payable of $2,750,mortgage payable of $38,500,current notes payable of $12,000,and taxes payable of $3,100.Art's current liabilities are:

Angelo's Paints has long-term notes payable of $30,000 and mortgage payable of $60,000.Angelo's long-term liabilities equal $90,000.

Joe's Kites is preparing an income statement.Net sales equal $175,000.Returns and allowances equal $16,000.Costs of goods sold equal $95,000.What is Joe's gross margin?

_____ is the cost of merchandise that has been sold during the period.

An income statement:

A(n)_____ depicts the amount of stock to have at the beginning of each month to support the forecasted sales for that month.

A retailer can grow quickly and be profitable on its income statement but still face financial problems due to an inadequate cash flow.

A retailer is experiencing a negative cash flow when its cash outflows exceed its cash inflows.

A stock-to-sales ratio represents the amount of stock a retailer needs to have on hand at the end of the month compared to the sales recorded during the month.

_____ is an intangible asset,usually based on customer loyalty that a retailer pays for when buying an existing business.

Net sales are:

The number one cause of retailing bankruptcies in recent years is cash flow problems.

A buyer's planned sales are $80,000,planned initial markup is $60,000 and planned reductions are $7,500.What is the buyer's planned gross margin on the merchandise budget?

Explain the five major merchandising decisions that a retailer must make when developing the merchandise budget.Why is a merchandising budget so important?

Your have just calculated the cost complement.Under the retail method of inventory valuation,what do you do next?

Depreciation is necessary because most noncurrent assets have a limited useful life; the difference between the asset and depreciation is intended to provide a more realistic picture of the retailer's assets and prevent an overstatement or understatement of these assets.

Perspectives on Retailing

Retail Strategic Planning and Operations Management

Retail Customers

Evaluating the Competition in Retailing

Managing the Supply Chain

Legal and Ethical Behavior

Market Selection and Retail Location Analysis

Merchandise Buying and Handling

Merchandise Pricing

Advertising and Promotion

Customer Service and Retail Selling

Store Layout and Design

Managing People

Filters

Exam 8: Managing a Retailer’s Finances

It is important for the retailer to remember that the merchandise budget serves no useful purpose if it cannot be understood by all decision makers.

Which of the following is an example of a cash outflow?

When physical inventory value exceeds book inventory value a retailer is said to have:

The purpose of the statement of cash flow is to enable a retailer to project the cash needs of the firm.

Art's Appliances has accounts payable of $65,000,payroll payable of $2,750,mortgage payable of $38,500,current notes payable of $12,000,and taxes payable of $3,100.Art's current liabilities are:

Angelo's Paints has long-term notes payable of $30,000 and mortgage payable of $60,000.Angelo's long-term liabilities equal $90,000.

Joe's Kites is preparing an income statement.Net sales equal $175,000.Returns and allowances equal $16,000.Costs of goods sold equal $95,000.What is Joe's gross margin?

_____ is the cost of merchandise that has been sold during the period.

An income statement:

A(n)_____ depicts the amount of stock to have at the beginning of each month to support the forecasted sales for that month.

A retailer can grow quickly and be profitable on its income statement but still face financial problems due to an inadequate cash flow.

A retailer is experiencing a negative cash flow when its cash outflows exceed its cash inflows.

A stock-to-sales ratio represents the amount of stock a retailer needs to have on hand at the end of the month compared to the sales recorded during the month.

_____ is an intangible asset,usually based on customer loyalty that a retailer pays for when buying an existing business.

Net sales are:

The number one cause of retailing bankruptcies in recent years is cash flow problems.

A buyer's planned sales are $80,000,planned initial markup is $60,000 and planned reductions are $7,500.What is the buyer's planned gross margin on the merchandise budget?

Explain the five major merchandising decisions that a retailer must make when developing the merchandise budget.Why is a merchandising budget so important?

Your have just calculated the cost complement.Under the retail method of inventory valuation,what do you do next?

Depreciation is necessary because most noncurrent assets have a limited useful life; the difference between the asset and depreciation is intended to provide a more realistic picture of the retailer's assets and prevent an overstatement or understatement of these assets.

Perspectives on Retailing

Retail Strategic Planning and Operations Management

Retail Customers

Evaluating the Competition in Retailing

Managing the Supply Chain

Legal and Ethical Behavior

Market Selection and Retail Location Analysis

Merchandise Buying and Handling

Merchandise Pricing

Advertising and Promotion

Customer Service and Retail Selling

Store Layout and Design

Managing People

Filters