Gross profit method

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Gross profit method is a method used to determine the value of the ending inventory using a predetermined gross profit rate. This method can be used to determine the value of ending inventory if a loss from fire occurs.


Definitions

According to College Accounting: A Practical Approach by Slater (13th edition)‎,

Gross profit method. A method used to determine the value of the ending inventory using a predetermined gross profit rate. This method can be used to determine the value of ending inventory if a loss from fire occurs.

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