Which of the following methods generally is used to determine the loss when inventory is destroyed or stolen?
A)Retail method
B)FIFO
C)LIFO
D)Gross profit method

Question

Quizplus · Accepted Answer

The gross profit method is commonly used to estimate the amount of loss that occurred when inventory is destroyed or stolen. This method estimates the cost of goods sold based on the gross profit percentage, which is calculated as (sales - gross profit) / sales. This estimated cost of goods sold can then be compared to the actual cost of goods sold to determine the amount of loss. The other methods listed (retail method, FIFO, LIFO) are not typically used for this purpose.

Which of the Following Methods Generally Is Used to Determine