The Gross Profit Method of Inventory Valuation Is NOT Suitable

Multiple Choice

The gross profit method of inventory valuation is NOT suitable when

A) a portion of the inventory is destroyed.
B) there is a substantial increase in inventory during the year.
C) there is no beginning inventory because it is the first year of operation.
D) the gross profit percentage applicable to the goods in ending inventory is different from the percentage applicable to the goods sold during the period.