Are you having trouble answering the question “Disadvantages of GPM”? If that’s the case, you don’t need to worry anymore. Azanswer has brought you the correct answer to your question.
Disadvantages of GPM
-An estimate of inventory since not validated by physical count and not acceptable under GAAP for annual financial statements.
-Uses past percentages to determine markup.
-Must be careful in applying a blanket % as a company may have different types of merchandise with a wide range of actual profit %’s.
We hope you have got the correct answer to your question “Disadvantages of GPM”, which was part of Accounting MCQs & Answers. Thanks for choosing us.