The specific identification inventory method should be used when the inventory consists of identical, low-cost units that are purchased and sold frequently.

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The specific identification inventory method should be used when each unit in the inventory can be individually identified and assigned a cost. This method is often used for high-cost items such as jewelry, artwork, or automobiles. For identical, low-cost units that are purchased and sold frequently, a method such as first-in, first-out (FIFO) or weighted average cost would be more appropriate.

The Specific Identification Inventory Method Should Be Used When the Inventory