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. 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






2. Costs involved in running the business






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






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






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






6. One that is just enough to move the goods






7. Total Assets/ Net Worth






8. (Cash + Accounts Receivable) / Current Liabilities






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






10. 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






11. 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.






12. 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.






13. Can be transformed simply and rapidly into cash






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






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






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






17. 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.






18. Evaluates the managament of capital






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






20. 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.






21. Buying errors - promotion errors - pricing errors - uncontrollable errors






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






23. Cost + Markup






24. 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






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






26. Original Retail price- markdown selling price






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






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






29. The higher the ratio the quicker current liabilities can be paid. This ratio also indicates the margin of safety a retailer has on hand to cover possible shrinkages






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






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






32. Liabilities+ Owner's equity or net worth






33. 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






34. 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






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






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






37. Net dollar markdown/ net dollar selling price






38. Short time - like 1 or 2 day sales






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






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






41. First price or Manufacturers suggestet Retal Price (MSRP)






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






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






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






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






46. Financial debts incurred by a retailer






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






48. 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.






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






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