Lyon Co. estimated its ending inventory using a method based on the financial statements of prior periods in order to prepare its quarterly interim financial statements. What type of inventory system and method of estimating ending inventory is Lyon using?

 Lyon Co. estimated its ending inventory using a method based on the financial statements of prior periods in order to prepare its quarterly interim financial statements. What type of inventory system and method of estimating ending inventory is Lyon using?

Inventory system    Method of estimating ending inventory
A.    Perpetual    Retail method
B.    Perpetual    Gross profit method
C.    Periodic    Sales method
D.    Periodic    Gross profit method
A.
B.
C.
D.
 You Answered Correctly!
Correct! This response is correct for both answers. The gross profit method can be used to estimate interim inventory, and the gross profit method is a periodic inventory system.