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






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






3. Liabilities+ Owner's equity or net worth






4. In Cost Method. Merchandise sold during a time period is assumed to be sold in the order the merchandise was received. Merchandise on hand for the longest period of time is sold first. Therefore - the ending inventory reflects the items in stock for






5. The number of items remaining in stock x dollar markdown






6. Cost Price/ (100%-markup %)






7. Short time - like 1 or 2 day sales






8. One that is just enough to move the goods






9. Reduction in price of an item - if that item is sold - the result is a lower monetary intake for that item






10. 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






11. 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.






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






13. Price Lining - price zones - price ranges






14. 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.






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






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






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






18. Buying errors - promotion errors - pricing errors - uncontrollable errors






19. Revenues received by a retailer






20. An aggregate of the original selling price. Should cover all expenses of the store - desired profit - take into account price reductions - alteration costs.






21. Temporary price reduction for a specific period of time for the express purpose of generating store traffic and sales. Prices return to original retail price at end of sale period.






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






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






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






25. Cash Received by the retailer-cash leaving the retailer






26. Net dollar markdown/ net dollar selling price






27. When new styles or models come out every year - thus forcing the obsolescence of the previous year's model






28. 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






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






30. 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.






31. AKA Return on Sales - Profit analysis; Indicates the extend to which retailers have the ability to cover their expenses and earn a profit - as well as a buyers ability to purchase the correct assortment of merchandise






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






33. 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.






34. 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






35. Total Expenses/ Net Sales






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






37. Total Assets/ Net Worth






38. Net Profit After Taxes/ Net Worth






39. The awareness of the consumer to what they perceive to be the window of cost within which they will buy a particular product or service






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






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






42. Cannot be readily converted to cash within one year. (Fixtures - equipment - land/buildings)






43. Current Liabilites/ Net Worth






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






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






46. 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.






47. The value of this calculation is that consumers can understand the price reduction when the retailer is promoting this merchandise.






48. Assets collected within one year. Due to the widespread use of credit cards - AR for retailers has diminished with exceptions such as lay-a-way.






49. Also referred to as the income or operating statement. 5 Basic Elements: Net Sales - Cost of Goods sold - Gross Margin - Operating Expenses - Net profit






50. Statistical forecasting tool that helps retailers to predict how apparel markdowns may affect the bottom-line business and objectives before the markdowns are implemented