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






2. Dollar markup ($)/ cost price ($)






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






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






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






6. Original Retail price- markdown selling price






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






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






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






10. 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






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






12. (planned expenses + planned operating profit + planned stock shortages + markdowns + employee and customer discounts) / (planned net sales + stock shortages + markdowns + employee and customer discounts) x 100%






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






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






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






16. Assesses the retailers ability to realize adequate return on the money that is invested by the retail owner.






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






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






19. Merchandise Available for sale at cost/ Merchandise available for sale at retail






20. Price is changed (up or down)






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






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






23. Net Profit After Taxes/ Net Worth






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






25. Price Lining - price zones - price ranges






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






27. Examines the financial health of a retailer - as one of the best indicators of having too much debt in relationship to net worth. Comparres the money that vendors or banks are risking with the money that the retail owners have invested in their opera






28. 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






29. Total Markup on all goods on hand/ retail price of all goods on hand






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






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






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






33. 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






34. Net Profit After Taxes/ Total Assets






35. Can be transformed simply and rapidly into cash






36. Financial debts incurred by a retailer






37. 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






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






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






40. Revenues received by a retailer






41. Liabilities+ Owner's equity or net worth






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






43. Net dollar markdown/ net dollar selling price






44. Basic premise is to increase profits through more sales without an increase in inventory. Inventory is expressed in cost terms rather than cost percent - because it is related to investment dollars in gross margin - it should be expressed in cost num






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






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






47. 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






48. Buying errors - promotion errors - pricing errors - uncontrollable errors






49. 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.






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