Which statement is correct about the specific identification method?
A)It is prone to earnings management if used for distinguishable items.
B)This method is most appropriate for low-value inventory items.
C)It is inexpensive to maintain inventory records under this method.
D)This method is most appropriate for high-value inventory items.

Question

Quizplus · Accepted Answer

The specific identification method is most appropriate for high-value inventory items such as luxury cars, jewelry, or artwork. This method involves assigning a specific cost to an individual item or group of items based on their unique characteristics. This method may not be practical for low-value items and may be prone to manipulation if used for distinguishable items. Additionally, maintaining inventory records under this method can be costly and time-consuming.

Which Statement Is Correct About the Specific Identification Method