Which of the following circumstances is not a reason to compute an estimate of the amount of inventory?
A)To evaluate the accuracy of a physical count of goods.
B)To complete the company's annual income tax return.
C)To prepare monthly or quarterly financial statements without incurring the expense of taking a physical inventory.
D)To support an insurance claim for a loss due to theft of inventory.

Question

Quizplus · Accepted Answer

Income tax returns require a physical count of inventory. The gross margin method is insufficient.

Which of the Following Circumstances Is Not a Reason to Compute