What is specific identification in accounting?
Understand the Problem
The question is asking for an explanation of the specific identification method used in accounting. This method involves identifying exactly which items are being sold or used, often used for high-value or unique items.
Answer
The specific identification method tracks and values inventory by identifying each individual item.
The specific identification method in accounting is a way to track and value inventory by identifying and following the purchase and sale of each individual item.
Answer for screen readers
The specific identification method in accounting is a way to track and value inventory by identifying and following the purchase and sale of each individual item.
More Information
The specific identification method is useful when tracking high-value or unique items that can be individually identified, such as vehicles or fine jewelry. This method ensures accurate tracking of costs and revenues associated with each item.
Tips
A common mistake is not properly tracking each individual item, which can lead to inaccurate financial records. Proper labeling and documentation are crucial.
Sources
- Specific Identification Inventory Valuation Method - Investopedia - investopedia.com
- Specific Identification Method for Inventory Valuation - corporatefinanceinstitute.com
- Specific Identification Accounting 101 - Deskera - deskera.com
