Under the Perpetual Inventory System, the Best Estimate of the Amount

Multiple Choice

Under the perpetual inventory system, the best estimate of the amount of inventory is:

A) shown on the previous period's financial statements.
B) provided by application of the gross margin method.
C) the book balance in the inventory account.
D) the beginning inventory balance minus sales for the perioD.In a perpetual inventory system, the balance in the inventory general ledger account should provide the best estimate of inventory on hand. The gross margin method should only be used if a book inventory and a physical inventory are unavailable.