The gross profit method of estimating inventory makes it possible to prepare monthly income statements without taking a physical inventory.

Name: The gross profit method of estimating inventory makes it possible to prepare monthly income statements without taking a physical inventory.
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The gross profit method estimates inventory by using the historical gross profit margin to estimate the cost of goods sold, which allows for the preparation of income statements without a physical inventory count.

The Gross Profit Method of Estimating Inventory Makes It Possible