Suggest which type of income statement

Suggest which type of income statement a retailer should use. Defend your suggestion.

Retailers should use a merchandising income statement because it is a multi-step income statement. This includes cost of goods sold, the sales, the statement also allows for returns and sales that will happen in the future but, not paid for yet.

Analyze inventory valuation methods discussed in the textbook. Based on your analysis, recommend the most accurate valuation method that reflects current economic conditions. Provide a rationale for your recommendation.

There are differrent types of valuation methods such as first in first out (FIFO), last in first out (LIFO), and Averages. In accounting the most important thing to remember is that once you use a valuation method that you stay with that method for the remainder of the accounting period so that the comparison's can be equal across the board. For example you should not start first quarter using LIFO then in the second quarter use FIFO. It also determines what business you are in on the type of method you should use for instance you should use FIFO for products that will go bad such as fruits or vegtables because that is what you will sell first the produce that you purchased first. My recommendations is to know your industry and use the method that makes the most sense.