The specific identification method is more appropriate than a cost flow assumption method:
A)For a large inventory of identical low-priced items.
B)If each item in the inventory is unique.
C)If purchase costs are rising.
D)If purchase costs are falling.

Question

Quizplus · Accepted Answer

The specific identification method is most appropriate when each item in the inventory is unique and can be individually identified and tracked. This method allows for the actual cost of each item to be used in determining the cost of goods sold and ending inventory. The cost flow assumption methods such as first-in, first-out (FIFO) or weighted average cost are more appropriate for large inventories of identical items or when it is impractical to track individual items. Therefore, choice B is the best option.

The Specific Identification Method Is More Appropriate Than a Cost