1. What are the two key disadvantages for a retailer opting to use a manual physical inventory system? Explain your answer.
2. Cost-based physical and book systems have significant disadvantages. What are these disadvantages, and what steps might a retailer take to overcome them? Which types of retailers are more likely to use them?
3. Compared with other techniques, there are several advantages to the retail method of accounting. What are they?
4. How do you calculate the stock-to-sales ratio, and what does it mean?