Which of the Following Is Not a Basic Assumption of the Gross

question 40

Multiple Choice

Which of the following is not a basic assumption of the gross profit method?

• A) The beginning inventory plus the purchases equal total goods to be accounted for.
• B) Goods not sold must be on hand.
• C) If the sales, reduced to the cost basis, are deducted from the sum of the opening inventory plus purchases, the result is the amount of inventory on hand.
• D) The total amount of purchases and the total amount of sales remain relatively unchanged from the comparable previous period.

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Definitions:

Quantity Demanded

The overall volume of a certain good or service that individuals are prepared and financially able to buy at a set price during a specified interval.

Price

The payment expected, demanded, or issued in compensation for something.

Demand Schedule

A diagram showing the volume of an item that shoppers intend and can afford to buy across a range of prices.

Income

The financial gain received by an individual or a business in exchange for providing a good or service or through investing capital.