A business that has inventory items that are ordinarily interchangeable is required to use the specific identification method of assigning costs to inventory.

Question

Quizplus · Accepted Answer

While the specific identification method is one option for assigning costs to inventory, a business is not required to use this method for interchangeable inventory items. Other acceptable methods include first-in, first-out (FIFO) and average cost.

A Business That Has Inventory Items That Are Ordinarily Interchangeable