Addis Company operates a large retail men's clothing store that has annual gross receipts of $30 million. Because Addis has merchandise inventory, it must use:

Question

Quizplus · Accepted Answer

Since Addis Company has merchandise inventory, it must use the accrual method to account for both sales and purchases of merchandise in order to accurately reflect its financial position and operating results. This method matches revenue and expenses in the period in which they are incurred, rather than when cash is received or paid out, providing a more accurate picture of the business's profitability.

Addis Company Operates a Large Retail Men's Clothing Store That