The gross profit method is not used to
A) replace the year-end physical inventory.
B) check the cost generated by a perpetual inventory system.
C) determine the cost of inventory destroyed by fire.
D) develop a sales budget.

Question

Quizplus · Accepted Answer

The gross profit method is not used to replace the year-end physical inventory because it is an estimation method and does not provide the accuracy needed for financial reporting.

The Gross Profit Method Is Not Used to