What is the specific identification method?
Understand the Problem
The question is asking for an explanation of the specific identification method, which is likely related to inventory accounting or cost accounting practices used to track the cost of individual items. This method helps businesses determine the actual cost of specific inventory items when sold.
Answer
Each individual item in inventory is tracked and assigned costs individually.
The specific identification method is an inventory costing technique where each individual item in inventory is tracked and assigned costs individually, from purchase to resale.
Answer for screen readers
The specific identification method is an inventory costing technique where each individual item in inventory is tracked and assigned costs individually, from purchase to resale.
More Information
The specific identification method is particularly useful for businesses with unique or high-value items, like cars, real estate, and collectibles.
Tips
A common mistake is failing to accurately track each item, which can lead to errors in inventory and financial statements.
Sources
- The web page with info on - Example Source - corporatefinanceinstitute.com
- Specific Identification Inventory Valuation Method - Investopedia - investopedia.com
- What Is the Specific Identification Method for Inventory Costs? - fool.com
