A company will most likely use an estimated method of determining inventory when
A) the company decides not to do a physical inventory.
B) a natural disaster has destroyed most of their inventory.
C) the company has not kept up with their inventory records.
D) the company is preparing annual financial statements.

Question

Quizplus · Accepted Answer

When a natural disaster destroys inventory, companies often use estimation methods to determine inventory levels for insurance claims and financial reporting, as physical counts are not possible.

A Company Will Most Likely Use an Estimated Method of Determining