Which of the following statements with respect to the gross profit method of estimating inventory is NOT correct?
A)It may be used for interim reporting.
B)It may be used to estimate ending inventory when inventory has been destroyed.
C)It uses the interrelationship between the accounts used in the cost of goods sold
Calculation.
D)The use of this method eliminates the need for performing an actual inventory count.

Question

Quizplus · Accepted Answer

The gross profit method is used to estimate inventory but does not eliminate the need for an actual inventory count, which is necessary for accurate financial reporting and verification.

Which of the Following Statements with Respect to the Gross