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Hi Mr John
Te term : ” selling price less estimated profit margin may be used to arrive at cost if this gives a reasonable approximation to actual cost ” .
Can you pls explain” …if this give a reasonable approximation to actual cost ” ?
Thanks Mr JohnThis method may be used if the figure calculated is similar to the likely actual cost.
Although you will appreciate from my free lectures (assuming that you have watched them) that the accounting standard only allows this method if the none of the other methods are possible, and that in the exam you cannot be asked calculations using this method.
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