Question 1

Operating profit is gross margin less operating expenses.

Accepted Answer

A) True 
 B)False

Question 2

Markdowns,employee discounts,and stock shortages are all various forms of reductions.

Accepted Answer

A) True 
 B)False

Question 3

Gross margin is the difference between net sales and cost of goods sold or the amount available to cover operating expenses and produce a profit.

Accepted Answer

A) True 
 B)False

Question 4

A retailer's planned purchase for a particular month are equal to the retailer's planned sales reductions,and desired EOM minus the retailer's BOM for that month.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following types of retail operations would be most likely to use the cost method of inventory valuation?

Accepted Answer

A)  A grocery store 
B)  A antique furniture store 
C)  A full-line department store 
D)  A discount department store 
E)  A bakery 
A)  A grocery store 
B)  A antique furniture store 
C)  A full-line department store 
D)  A discount department store 
E)  A bakery

Question 6

Reductions should be included in a merchandise budget only when they exceed 5% of sales.

Accepted Answer

A) True 
 B)False

Question 7

Operating expenses are those expenses that the retailer incurs in the operation of the business,other than the cost of goods sold.

Accepted Answer

A) True 
 B)False

Question 8

The most important financial statement a retailer prepares is the:

Accepted Answer

A)  merchandise budget. 
B)  sales report. 
C)  balance sheet. 
D)  statement of cash flow. 
E)  income statement. 
A)  merchandise budget. 
B)  sales report. 
C)  balance sheet. 
D)  statement of cash flow. 
E)  income statement.

Question 9

_____ is the planning and control of the buying and selling of goods and services,to help the retailer realize its objectives.

Accepted Answer

A)  Retailing 
B)  Retail reduction analysis 
C)  Merchandising 
D)  Forecasting 
E)  Store management 
A)  Retailing 
B)  Retail reduction analysis 
C)  Merchandising 
D)  Forecasting 
E)  Store management

Question 10

If the ending book value inventory is greater than the ending physical inventory,a overage has occurred.

Accepted Answer

A) True 
 B)False

Question 11

The greatest uncontrollable variable every retailer must face is movement of holidays.

Accepted Answer

A) True 
 B)False

Question 12

The use of the FIFO method of inventory valuation during high inflationary periods produces lower profits on the income statement and results in lower taxes.

Accepted Answer

A) True 
 B)False

Question 13

A statement of cash flow:

Accepted Answer

A)  lists all income and expenses for a given time period. 
B)  involves forecasting the cash value of the retailer's inventory. 
C)  involves forecasting the present value of accounts receivable. 
D)  explains the changes in cash and cash equivalents from one accounting period to the next by showing all cash inflows and all cash outflows for the given time period. 
E)  shows if the firm made money over a given time period. 
A)  lists all income and expenses for a given time period. 
B)  involves forecasting the cash value of the retailer's inventory. 
C)  involves forecasting the present value of accounts receivable. 
D)  explains the changes in cash and cash equivalents from one accounting period to the next by showing all cash inflows and all cash outflows for the given time period. 
E)  shows if the firm made money over a given time period.

Question 14

Stock-to-sales ratios always express inventory levels at retail,not cost.

Accepted Answer

A) True 
 B)False

Question 15

Simon's Jewelry has a total cash inflow of $100,000 and total cash outflow of $80,000.Total cash flow is negative $20,000.

Accepted Answer

A) True 
 B)False

Question 16

Most retailers have four seasons a year (1)spring (2)summer (3)fall and (4)winter.

Accepted Answer

A) True 
 B)False

Question 17

Holly's Arts and Crafts had a retail inventory available for sale of $700,000,while sales were $210,000,markdowns were $5,000 and discounts were $2,000.What is the ending inventory at retail?

Accepted Answer

A)  $490,000 
B)  $483,000 
C)  $485,000 
D)  $693,000 
E)  $695,000 
A)  $490,000 
B)  $483,000 
C)  $485,000 
D)  $693,000 
E)  $695,000

Question 18

The balance sheet identifies and quantifies the firm's assets and liabilities.

Accepted Answer

A) True 
 B)False

Question 19

A merchandise budget is a plan of:

Accepted Answer

A)  projected sales for an upcoming season, when and how much merchandise is to be purchased, and what segments of the market to target. 
B)  projected sales for an upcoming season when and how much merchandise is to be purchased, and what markups and reductions will likely occur. 
C)  projected sales for an upcoming season, when and how much merchandise is to be purchased (excluding potential markups and reductions). 
D)  projected sales for an upcoming year, when and how much merchandise is to be purchased, and what reductions will likely occur. 
E)  projected reductions for the upcoming season. 
A)  projected sales for an upcoming season, when and how much merchandise is to be purchased, and what segments of the market to target. 
B)  projected sales for an upcoming season when and how much merchandise is to be purchased, and what markups and reductions will likely occur. 
C)  projected sales for an upcoming season, when and how much merchandise is to be purchased (excluding potential markups and reductions). 
D)  projected sales for an upcoming year, when and how much merchandise is to be purchased, and what reductions will likely occur. 
E)  projected reductions for the upcoming season.

Question 20

The terms "retailing" and "merchandising" are synonymous.

Accepted Answer

A) True 
 B)False

Operating profit is gross margin less operating expenses.

Markdowns,employee discounts,and stock shortages are all various forms of reductions.

Gross margin is the difference between net sales and cost of goods sold or the amount available to cover operating expenses and produce a profit.

A retailer's planned purchase for a particular month are equal to the retailer's planned sales reductions,and desired EOM minus the retailer's BOM for that month.

Which of the following types of retail operations would be most likely to use the cost method of inventory valuation?

Reductions should be included in a merchandise budget only when they exceed 5% of sales.

Operating expenses are those expenses that the retailer incurs in the operation of the business,other than the cost of goods sold.

The most important financial statement a retailer prepares is the:

_____ is the planning and control of the buying and selling of goods and services,to help the retailer realize its objectives.

If the ending book value inventory is greater than the ending physical inventory,a overage has occurred.

The greatest uncontrollable variable every retailer must face is movement of holidays.

The use of the FIFO method of inventory valuation during high inflationary periods produces lower profits on the income statement and results in lower taxes.

A statement of cash flow:

Stock-to-sales ratios always express inventory levels at retail,not cost.

Simon's Jewelry has a total cash inflow of $100,000 and total cash outflow of $80,000.Total cash flow is negative $20,000.

Most retailers have four seasons a year (1)spring (2)summer (3)fall and (4)winter.

Holly's Arts and Crafts had a retail inventory available for sale of $700,000,while sales were $210,000,markdowns were $5,000 and discounts were $2,000.What is the ending inventory at retail?

The balance sheet identifies and quantifies the firm's assets and liabilities.

A merchandise budget is a plan of:

The terms "retailing" and "merchandising" are synonymous.

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

Operating profit is gross margin less operating expenses.

Markdowns,employee discounts,and stock shortages are all various forms of reductions.

Gross margin is the difference between net sales and cost of goods sold or the amount available to cover operating expenses and produce a profit.

A retailer's planned purchase for a particular month are equal to the retailer's planned sales reductions,and desired EOM minus the retailer's BOM for that month.

Which of the following types of retail operations would be most likely to use the cost method of inventory valuation?

Reductions should be included in a merchandise budget only when they exceed 5% of sales.

Operating expenses are those expenses that the retailer incurs in the operation of the business,other than the cost of goods sold.

The most important financial statement a retailer prepares is the:

_____ is the planning and control of the buying and selling of goods and services,to help the retailer realize its objectives.

If the ending book value inventory is greater than the ending physical inventory,a overage has occurred.

The greatest uncontrollable variable every retailer must face is movement of holidays.

The use of the FIFO method of inventory valuation during high inflationary periods produces lower profits on the income statement and results in lower taxes.

A statement of cash flow:

Stock-to-sales ratios always express inventory levels at retail,not cost.

Simon's Jewelry has a total cash inflow of $100,000 and total cash outflow of $80,000.Total cash flow is negative $20,000.

Most retailers have four seasons a year (1)spring (2)summer (3)fall and (4)winter.

Holly's Arts and Crafts had a retail inventory available for sale of $700,000,while sales were $210,000,markdowns were $5,000 and discounts were $2,000.What is the ending inventory at retail?

The balance sheet identifies and quantifies the firm's assets and liabilities.

A merchandise budget is a plan of:

The terms "retailing" and "merchandising" are synonymous.

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