A problem with the specific identification formula is that
A) inventories can be reported at actual costs.
B) management can manipulate net income.
C) matching is not achieved.
D) lower of cost and net realizable value cannot be applied.

Question

Quizplus · Accepted Answer

The specific identification method allows management to select which specific items are sold, potentially manipulating net income by choosing items with higher or lower costs to affect the cost of goods sold and, consequently, net income.

A Problem with the Specific Identification Formula Is That