When Using the Gross Margin Method to Estimate Inventory, Which

question 137

Multiple Choice

When using the gross margin method to estimate inventory, which of the following is a step in the computation?

• A)Add the amount goods available for sale to estimated cost of goods sold.
• B)Add estimated gross margin to sales.
• C)Subtract estimated cost of goods sold from the amount of goods available for sale.
• D)Subtract estimated goods available for sale from beginning inventory.

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Definitions:

Tax Returns

Tax returns are forms filed with taxing authorities that report income, expenses, and other pertinent tax information.

Corporate Tax

A tax imposed on the income or profit of corporations and businesses by the government.

Individual Income Tax

A tax imposed by federal, state, and/or local governments on the income earned by individuals.

Earnings and Profits

A measure of a company's ability to generate income over its expenses, often used in corporate taxation.