Is the Retail Inventory Method accurate?

It is as accurate as any inventory method. It is much easier to take inventory at retail if you are on the floor counting the items because they are priced at retail. When you reconcile the number of units on hand vs the number purchased, you will know how many you sold or are not accounted for in the sales records. The term for those missing items is "shrinkage" and is a factor in GMROI. Theft of merchandise, mark downs and paperwork errors contribute to shrinkage....one important reason to take inventory. The problem with cost inventories (from my view) is that discounts, volume pricing and other variances to the cost of like items makes it hard for the inventory taker to determine which one was purchased at one cost, and which one at another. If the merchandise tags are coded and inventoried using those codes, the cost can be applied post inventory. A complete and accurate count, no matter how you do it, is what matters.