Estimating inventory may be needed for all of the following reasons except when the periodic method is used instead of taking a physical inventory.
A detailed annual report produced by a corporate concern that includes all inventory, stock, work-in-progress, raw materials, finished goods, and other items. the things or things that are depicted on such a list, such as a retailer's inventory of goods. the whole worth of a stock of merchandise.
Periodic inventory is a type of accounting inventory where inventory and cost of goods sold are computed at the end of an accounting period as opposed to every day.
Physical inventory is a stock-taking technique in which retail workers manually count shop merchandise and modify the inventory levels in their POS software if they discover any errors.
Smaller companies with modest inventory holdings are best suited for a periodic inventory system. It is simple to do a physical inventory count for such businesses. Estimating the cost of commodities sold over predetermined time periods is likewise much simpler.
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