Ask Question
BusinessBusiness
8 February, 21:05

Which statement is true about the gross profit method of inventory valuation?

a. It may be used to estimate inventories for annual statements.

b. It may be used to estimate inventories for interim statements.

c. It eliminates the need for physical inventories.

d. When calculated on selling price, it will always be more than the related percentage based on cost.

+3
Answers (1)
  1. 8 February, 22:06
    0
    b. It may be used to estimate inventories for interim statements.

    Explanation:

    As we know that

    Gross profit = Sales - the cost of goods sold

    By doing the inventory valuation through the gross profit method, it estimated inventories for interim statements as these statements are covering the financial information that is less than a year so that the proper analysis could be made and in this, no auditing is required.

    Therefore, for interim statements, the gross profit method is required.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Which statement is true about the gross profit method of inventory valuation? a. It may be used to estimate inventories for annual ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers
You Might be Interested in
The spot price of silver is $25 per ounce. The storage costs are $0.24 per ounce per year payable quarterly in advance. Assuming that interest rates are 5% per annum for all maturities, calculate the futures price of silver for delivery in 9 months.
Answers (1)
On January 1, 2019 Miller Corporation had retained earnings of $8,000,000. During 2019, Miller reported net income of $1,500,000, declared dividends of $500,000, and had revenues of for $10,000,000.
Answers (1)
An interviewer can form a strong opinion of you within the first 30 seconds of meeting you.
Answers (1)
Which option would you select to control being linked to other people's posts? Timeline and tagging settings Location settings Security settings Privacy and tools
Answers (1)
Using the adage you get what you measure when designing the performance evaluation system
Answers (1)
New Questions in Business
Monmouth Inc.'s stock has a 30% chance of producing a 20% return, a 30% chance of producing a 10% return, and a 40% chance of producing a - 10% return. What is the firm's expected rate of return?
Answers (2)
Oahu Industries' average total assets for the year are $4,000,000, its average total stockholders' equity for the year are $3,000,000, its net income is $800,000, its gross margin is $2,000,000, and its net sales are $10,000,000.
Answers (1)
Following the completion of the bank reconciliation, an adjusting entry was made that debited cash and credited Interest Revenue. Therefore the bank reconciliation must have included an item that was: A.
Answers (2)
Which of the following is least likely to be a factor in developing a sales forecast? a. Number of salespeople employed by the firm's major competitors b. Geographic area in which the product is sold c. Entire product line d.
Answers (1)
Should you use a personal website, such as a blog, for research? Question 20 options: True False
Answers (1)
Home » Business » Which statement is true about the gross profit method of inventory valuation? a. It may be used to estimate inventories for annual statements. b. It may be used to estimate inventories for interim statements. c.
Sign Up Forgot Password?