Under generally accepted accounting principles, management has the choice of physically counting inventory on hand at the end of the year or using the gross profit method to estimate the ending inventory.

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Under generally accepted accounting principles (GAAP), companies are required to physically count their inventory at least once a year to ensure the accuracy of their financial records. The gross profit method is used for estimating inventory levels for interim periods or for internal purposes, but it cannot replace the physical inventory count for the official financial statements.

Under Generally Accepted Accounting Principles, Management Has the Choice of Physically