The gross profit method of estimating inventory would NOT be useful when
A) a periodic system is in use and inventories are required for interim statements.
B) there is a significant change in the mix of products being sold.
C) inventories have been destroyed or lost by fire,theft,or other casualty,and the specific data required for inventory valuation are not available.
D) the relationship between gross profit and sales remains stable over time.

Question

Quizplus · Accepted Answer

The gross profit method assumes a relatively stable relationship between gross profit and sales. A significant change in the mix of products being sold could lead to an inaccurate estimate of inventory using this method.

The Gross Profit Method of Estimating Inventory Would NOT Be