Which of the Following Is NOT a Premise Upon Which

question 108

Multiple Choice

Which of the following is NOT a premise upon which the gross profit method of estimating inventory is based?

• A) Beginning inventory plus purchases equals cost of goods available for sale.
• B) The gross profit must be equal to the contribution margin on goods sold.
• C) Goods not included in cost of goods sold must be on hand in ending inventory.
• D) When an estimate of cost of goods sold is deducted from cost of goods available for sale, the result is an estimate of ending inventory.

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