Question

A method of allocating merchandise cost requiring each item sold and each item remaining in inventory to be separately identified with respect to its purchase cost is called the

Answer 1

Answer: Specific Identification

Explanation: When items in an inventory are valued singularly rather than being evaluated based on a grouped analysis. In the specific identification inventory valuation method, each singular item in an inventory is monitored and accounted for separately, each items is tagged with its own cost, amount left in inventory. The specific identification method seems quite tedious when dealing with relatively cheap items which is always numerous in units such as small items like shirts, pen and so on. However, it is very useful in the valuation of large, luxurious and expensive items.