The Second Step in Using the Gross Profit Method to Estimate

question 2

Multiple Choice

The second step in using the gross profit method to estimate ending inventory is to:

• A) estimate the cost of goods sold.
• B) calculate the cost of goods available for sale.
• C) estimate the ending inventory.
• D) estimate the beginning inventory.
• E) estimate net income.

---

Definitions:

Market Status

The current condition or position of a product, service, or company in the competitive marketplace.

Shareholders

Individuals or entities that own shares in a corporation, thus having a partial ownership interest in the company.

Investments

Assets or items acquired with the goal of generating income or appreciation in value over time.

Returns

A term used in finance to describe the profit or loss derived from investing or saving.