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.

---

Definitions:

Population Standard Deviation

A measure of the dispersion or spread of a set of data points in a population from its mean, indicating how widely the data points are scattered.

Significance Level

Another term for the level of significance, denoting the threshold below which the null hypothesis is rejected in a statistical test.

Normal Population

A population distribution that follows the normal (Gaussian) statistical distribution, characterized by a bell-shaped curve.

Standard Deviation

A measure of the dispersion or variability in a set of data values, indicating the average distance from the mean.