Gross Profit Method
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Description
A method of estimating the cost of the ending inventory based on the assumption that the rate of gross profit remains approximately the same from year to year. Used for interim valuations and for estimating losses.
Concept Prerequisite
Wikipedia Reference
http://en.wikipedia.org/wiki/Inventory valuation#Methods used to estimate inventory cost
Learning Material
Covered in Topic(s)
| Inventories & the COGS |