Question

Estimating inventory may be needed for all of the following reasons except a.when monthly or quarterly financial statements are needed, but a physical inventory is taken only once a year. b.when it is impractical to take a physical inventory. c.when the periodic method is used instead of taking a physical inventory. d.when a fire has destroyed the inventory and inventory records.

Answer 1

Option C

Estimating inventory may be needed for all of the following reasons except when the periodic method is used instead of taking a physical inventory.

Explanation:

Estimating inventory is seldom a significant means for all business particularly when a physical count is unrealistic or unattainable. You may necessitate knowing the amount of your business inventory that was devastated by floods.

Firms that use the persistent system should inform the inventory account balance while such situations, but companies using the periodical system must assess the value of inventory. The retail inventory method and gross profit method are a couple of ways of assessing the value of inventory.