Ask Question
BusinessBusiness
27 June, 07:25

The gross profit method of inventory valuation is not valid when a. there is substantial increase in the quantity of inventory during the year. b. there is substantial increase in the cost of inventory during the year. c. the gross margin percentage changes significantly during the year. d. all ending inventory is destroyed by fire before it can be counted.

+2
Answers (1)
  1. 27 June, 08:22
    0
    The gross profit method of inventory valuation is not valid when

    c. the gross margin percentage changes significantly during the year.

    Explanation:

    Gross Profit Method:

    It is such method that is used to determine the value of ending inventory in a specific period.

    The option a, b and d are valid as this method is used when there is substantial increase in the quantity of inventory or in the cost of the inventory during the year. Moreover, it is also used to calculate the amount of ending inventory that is effected by a disaster such as fire, theft etc. The option c is not valid because it is not used when the gross margin percentage changes significantly during the year as gross profit method is only used to determine the amount of an ending inventory.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “The gross profit method of inventory valuation is not valid when a. there is substantial increase in the quantity of inventory during the ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers
You Might be Interested in
What measures can be taken to promote or improve E-commerce practices?
Answers (1)
Colossal Beverages Company sells two products, A and B. Mist predicts that it will sell 3 comma 000 units of A and 1 comma 500 units of B during the next period. The unit contribution margins are $ 4.00 and $ 4.80 for products A and B, respectively.
Answers (1)
Based on the information below, what is the firm's optimal capital structure? a. Debt = 40%; Equity = 60%; EPS = $2.95; Stock price = $26.50. b. Debt = 50%; Equity = 50%; EPS = $3.05; Stock price = $28.90. c. Debt = 60%; Equity = 40%; EPS = $3.
Answers (1)
Suppose Joe is maximizing total utility within his budget constraint. If the price of the last pair of jeans purchased is $25 and it yields 100 units of extra satisfaction and the price of the last shirt purchased is $20, then, using the rule of
Answers (1)
What is the screening effect? A. the theory that the completion of college indicates to employers that a job applicant is intelligent and hardworking B. all nonmilitary people who are employed or unemployed C.
Answers (1)
New Questions in Business
Paper Clip Company sells office supplies. The following information summarizes the company's operating activities for the year: Utilities for the store $ 10 comma 300 Sales commissions 10 comma 300 Sales revenue 164 comma 100 Purchases of
Answers (1)
If joe were to introduce himself as dr. early to sell to gensol, knowing that people would assume that he was a medical doctor, but never tell anyone that he was, would contracts entered into be considered to be fraudulent?
Answers (1)
Which of the following are reasons the aggregate demand curve is downward sloping? Check all that apply. 1) A higher price level decreases the real value of consumers' assets.
Answers (1)
If Gerry makes a deposit of $1,500 at the end of each quarter for five years, how much will he have at the end of the five years assuming a 12% annual return and quarterly compounding?
Answers (1)
Explain how globalization influence management
Answers (1)
Home » Business » The gross profit method of inventory valuation is not valid when a. there is substantial increase in the quantity of inventory during the year. b. there is substantial increase in the cost of inventory during the year. c.
Sign Up Forgot Password?