The First Step in Using the Gross Profit Method to Estimate

question 74

Multiple Choice

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

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

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Definitions:

SEC

The Securities and Exchange Commission, a U.S. government agency responsible for enforcing federal securities laws and regulating the securities industry.

Generally Accepted Accounting Principles

A collection of commonly followed accounting rules and standards for financial reporting in the United States.

Financial Accounting Standards Board

An independent organization responsible for establishing accounting and financial reporting standards for companies and non-profit organizations in the United States.

Private Sector

The private sector comprises businesses and organizations not owned or operated by the government, typically focused on profit-making objectives.