Match the following terms with the appropriate definition.
-The method of assigning costs to inventory where the purchase cost of each item in inventory is identified and used to determine the cost of inventory.
A)Gross profit method
B)Inventory turnover
C)Conservatism principle
D)Consistency concept
E)Consignor
F)Consignee
G)Days' sales in inventory
H)Retail inventory method
I)Specific identification method
J)Lower of cost or market

Question

Quizplus · Accepted Answer

The specific identification method involves tracking and assigning the actual cost of each specific item in inventory to determine the cost of goods sold and ending inventory. This method is used when the items are distinguishable from each other and have a significant cost, such as in the case of automobiles, real estate, or unique pieces of art.

Match the Following Terms with the Appropriate Definition