Which Statement Is NOT True About the Gross Profit Method

question 166

Multiple Choice

Which statement is NOT true about the gross profit method of inventory valuation?

• A) It may be used to estimate inventories for interim statements.
• B) It may be used to estimate inventories for annual statements.
• C) It may be used by auditors.
• D) It may be used to provide a rough check on the accuracy of the physical inventory count.

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Definitions:

ADP

Adenosine Diphosphate, a compound involved in energy transfer within cells, produced through the breakdown of ATP (Adenosine Triphosphate).

Isotonic Solution

A solution that has the same osmotic pressure as the fluid in a cell, leading to no net movement of water into or out of the cell.

Red Blood Cells

The cells in the blood primarily responsible for carrying oxygen from the lungs to the rest of the body, using the protein hemoglobin.

Hypertonic

Describes a fluid that has a high overall solute concentration relative to another fluid.