Test your basic knowledge |

Retail Financials

Subject : business-skills
Instructions:
  • Answer 50 questions in 15 minutes.
  • If you are not ready to take this test, you can study here.
  • Match each statement with the correct term.
  • Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.

This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.
1. Merchandise will sell at highest price longer period of time - appear exclusive - sale of goods at regular price is not disrupted - greater amount of goods can be accumulated and then marked down.






2. The largest sum of money in current assets. Can be presented in either cost or retail terms. Should be purchased for a short period of time - as products lose monetary value over time and are subject to markdowns.






3. Promotional markdown that involves selling at or near cost for promotional purposes






4. Revenues received by a retailer






5. Based on a calculation commonly represented as a percentage - comparing the amount of inventory a retailer receives from a manufacturer or supplier against what is actually sold to the consumer






6. The difference between the total delivered cost and the total retail price of merchandise handled during a given period.






7. Price is changed (up or down)






8. Liabilities+ Owner's equity or net worth






9. Wrong Merchandise - odd assortment colors/sizes - seasonal goods






10. Amount of markdown usually less - take the loss early will be easier - strengthen goodwill - replenish stock in lower price lines - leads to higher stock turnover - higher likelihood merchandise will sell in a timely manner






11. Strategy employed by retailers to buy and carry a predetermined number of price lines for a category of merchandise






12. Sales for the period/ average inventory






13. Debts owned by a retailer that require payment over an extended period of time (Fixtures - equipment - and property)






14. Dollar Markdown of Merchandise/ original retail selling price of merchandise being marked down






15. Dollar markup ($)/ retail price ($)






16. 1. Determine merchandise available for sale at both cost and retail prices. 2.Calculate the cost to retail complement or percentage relationship of the cost of merchandise to the selling price. 3. Subtract markdowns taken during the period. 4. Determ






17. Financial obligations that require payment within a short period of time (Wages - utitilites - Insurance)






18. In the Cost Method. Merchandise most recently purchased is assumed to have been sold first. Therefore - the ending inventory reflects the items in stock for the longest period of time. Produces lowest ending inventory value and highest cost of goods






19. Current Assets/ Current Liabilities






20. Can be transformed simply and rapidly into cash






21. To make a profit buyers must set an appropriate price considering many variables and using past experience and knowledge of future trends. A markup on an item does not typically remain constant.






22. Price change that results in reestablishing the original retail price to merchandise after it was temporarily marked down






23. The extent to which a retailer is using debt or borrowed funds to operate the business. (The higher the FLR the higher the debt)






24. (gross margin % x Turnover) / (100%-markup %)






25. The retailers financial condition at a specific point in time






26. Short time - like 1 or 2 day sales






27. Price Lining - price zones - price ranges






28. Improper displays - merchandise returns due to high pressure selling






29. Inventory Valuation Method that combines taking inventory at retail prices and adjusting the cost value to reflect current retail value. 5 Steps Involved.






30. Priced too high initially - priced too low - selling price of competitors






31. All of the capital used in operating the store - whether provided by the owners or creditors (vendors - banks)






32. Price reduction for merchandise that has not lived up to buyers' expectations. Includes broken assortments of merchandise - merchandise lines that buyers no longer want to carry - shopworn goods - items that haven't sold because of an event beyond bu






33. Buying errors - promotion errors - pricing errors - uncontrollable errors






34. Evaluates the managament of capital






35. Net Profit After Taxes/ Total Assets






36. Gross margin less operating expenses=NP before taxes. Deducting taxes=NP after taxes






37. The cost of merchandise that was sold (including the method that was used to determine cost)






38. Usually lower than original - but held for longer period






39. The prices from lowest to highest that are carried within a merchandise category






40. Costs involved in running the business






41. The energizing force that fuels and sustains our economic system






42. (1) Response of consumers and (2) cost of receiving - handling - and placing merchandise for sale.






43. Having the right merchandise - at the right time - for the right price - in the right place






44. Indicates gross margin derived from the sales of merchandise and it's ability to cover operating expenses. Helps a retailer determine how much rent they should pay - what salary the owner should draw - and how much they should pay their associates.






45. Ensures that there is enough cash to pay debts. Any time the ratio is colse to 1 - the retailer is said to be in a liquid position.






46. When fixed assets such as fixtures and equipment are continually used and therefore lose some of their monetary value (Ex: your car)






47. Ranges of prices that appeals for a particular group of consumers






48. Inventory Valuation Method where the cost to the retailer of each item purchased from a vendor is entered in the accounting system and/or placed on the merchandise item or on it's package. At times - freight charges are built into the cost. Coding of






49. Represents the total dollar markdown as a percentage of total dollar net sales. This is typically not for an individual item.






50. Beggining inventory for a time period+ purchases=merchandise available for sale- ending inventory