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. 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






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






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






4. 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






5. 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.






6. Current Assets/ Current Liabilities






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






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






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






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






11. Net Profit After Taxes/ Net Worth






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






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






14. Current Liabilites/ Net Worth






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






16. 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.






17. 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






18. Financial debts incurred by a retailer






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






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






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






22. Evaluates the managament of capital






23. 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






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






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






26. 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






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






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






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






30. Short time - like 1 or 2 day sales






31. The weather - merchandise is shopworn - economic downturn






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






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






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






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






36. Total Assets/ Net Worth






37. 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.






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






39. (Cash + Accounts Receivable) / Current Liabilities






40. 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






41. 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.






42. 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






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






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






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






46. Buying errors - promotion errors - pricing errors - uncontrollable errors






47. 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






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






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






50. Net dollar markdown/ net dollar selling price