The Gross Profit Method Is Often Used to Estimate the Cost

question 69

Multiple Choice

The gross profit method is often used to estimate the cost of ending inventory. The gross profit method should not be used to ________.

• A) determine the cost of ending inventory during an interim period without performing a physical count
• B) determine the cost of ending inventory for an annual financial statement
• C) determine the cost of inventory that has been stolen or destroyed
• D) develop budgets

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Definitions:

Chromatin

Chromatin is the complex of DNA and proteins that forms chromosomes within the nucleus of eukaryotic cells.

Cristae

Cristae are the folds of the inner mitochondrial membrane, increasing the surface area for ATP production within a cell.

Cisternae

Flattened membrane-bound sacs found in the endoplasmic reticulum and Golgi apparatus, involved in protein and lipid synthesis and transport.

Hydrolytic Enzymes

Enzymes that catalyze the breakdown of molecules by adding water, involved in various biological processes including digestion.