The specific identification method and the LIFO method produce the same results under both the perpetual and periodic inventory systems.

Question

Quizplus · Accepted Answer

The specific identification method and the LIFO method may produce different results under both perpetual and periodic inventory systems. Under the specific identification method, each item is identified and costed individually, while under the LIFO method, the cost of the most recent items purchased is matched with the cost of goods sold first. Therefore, if prices are increasing, LIFO will result in a higher cost of goods sold and a lower ending inventory compared to specific identification.

The Specific Identification Method and the LIFO Method Produce the Same