An assumption necessary to the use of the Gross Profit method is that the

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The Gross Profit Method assumes that the rate of Gross Profit is constant from period to period. This means that the percentage of Gross Profit, which is calculated by dividing Gross Profit by Net Sales, should be consistent over time. This assumption is necessary to accurately estimate the cost of goods sold and the ending inventory balance based on the Gross Profit method calculation. The other options, A, B, and D, are not relevant assumptions for the Gross Profit method.

An Assumption Necessary to the Use of the Gross Profit