A Problem with the Specific Identification Method Is That

question 40

Multiple Choice

A problem with the specific identification method is that

• A) inventories can be reported at actual costs.
• B) management can manipulate income.
• C) matching is not achieved.
• D) the lower-of-cost-or-market basis cannot be applied.

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Definitions:

Storage

The action or method of storing goods, data, or information for future use.

Physical Possession

The actual holding or control of property, as opposed to constructive possession which is the legal right to control.

Insurable Interest

The legitimate interest or stake a policyholder must have in the subject matter of the insurance policy, such that they would suffer financial loss or damage from its harm or destruction.

Goods In Bailment

Items that are temporarily transferred into another's custody for a specific purpose, but ownership is not transferred.