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It is cost effective and simple for companies to implement since it reduces the number of physical inventory counts. It is also accepted as a method of determining cost of goods sold for income tax purposes by the IRS.

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Q: Advantages and disadvantages the retail inventory method?
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What methods do not require a physical inventory periodic inventory system perpetual inventory method retail method or gross profit method?

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What is adjusted selling price method in valuation of inventories?

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Is it good or bad for a retail store to have a large inventory and why?

There are advantages as well as disadvantages of having a large inventory. Few of them are listed below: Advantages: 1. Keeping up with consumer demand i.e. no loss of sales 2. Opportunity to purchase at lower per unit price through bulk buying Disadvantages: 1. High storage, insurance, security costs. 2. Risk of Obsolescence. 3. Money spent on purchasing large inventory could have better spent elsewhere.


What is difference between periodic inventory and perpetual inventory?

Periodic inventory method calculate ending stock at the end of the accounting period, which could be Month to Date or Year to Date, while Perpetual inventory system calculates the ending stock on a continuous basis after each transaction (Purchase or Sell). Within Retail industry, periodic inventory method used for inventory valuation at the stores, whereas distributer like SuperValu (in US) follows perpetual inventory method to track inventory in their distribution centers. As a best practice, some of the retail companies are using perpetual accounting method to track inventory available in warehourses and distribution centers. In an idealistic world, perpetual inventory method can provide the true and real time inventory information, however due to complexities in consolidating all the purchases, sales, shrinkages and other market factors, it is advisable for retail companies to follow periodic accounting method to analyze and review the results before presenting the inventory valuation results to internal and external agencies like Shareholders, Income Tax Authorities, et el.


What are the Advantage and disadvantages of retail trade?

Some advantages to working in the retail trade include flexible scheduling; and the ability to increase your pay with bonuses and commission. Disadvantages of working with in the retail trade include unreliable income and dealing with unhappy customers.


What are the advantages and disadvantages of retail store?

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Advantages and disadvantages of a retail park?

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What are some advantages of a retail information system?

A retail information system would anticipate the needs of the manager, while collecting and organizing the stores data. Some advantages of having a retail information system can include:Increased time of transaction speed which would reduce the time customers spend in lineImprove accuracy of sales and keep better track of inventory


What are the advantages and disadvantages of using a wholesaler?

There are many advantages to buying from a wholesaler instead of buying from a retail outlet, but the most notable reasons are that you can usually buy items at or lower than the suggested retail price, or buy multiple units of items at a significantly cheaper prices.