Question: How does the retail inventory method establish the lower-of-cost-or-market valuation for ending inventory? By excluding beginning inventory from the cost-to-retail ratio. By excluding net markups

How does the retail inventory method establish the lower-of-cost-or-market valuation for ending inventory?

By excluding beginning inventory from the cost-to-retail ratio.

By excluding net markups from the cost-to-retail ratio.

By excluding net markdowns from the cost-to-retail ratio.

The procedure is applied on a cost basis at the unit level.

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