The gross profit method is based on the assumption that the rate of gross profit remains constant from one year to the next.

Name: The gross profit method is based on the assumption that the rate of gross profit remains constant from one year to the next.
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The gross profit method assumes that the rate of gross profit remains constant, allowing for the calculation of estimated cost of goods sold and ending inventory based on the company's gross profit percentage.

The Gross Profit Method Is Based on the Assumption That