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One of the Disadvantages of the Specific Identification Inventory Cost

question 22

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One of the disadvantages of the specific identification inventory cost flow method is that it can allow managers of a business to manipulate the amount of income the business reports by choosing which item to sell if the cost is different for identical items of inventory.


Definitions:

Comprehensive Impact

The wide-ranging effects or outcomes of an action or event, covering all aspects and consequences.

Top-Down Change

The change initiatives come from senior management.

Strategic Changes

Refers to major decisions and actions taken by an organization to achieve its long-term goals and adapt to external changes.

Organisational Targets

Specific goals or objectives that a company or organization aims to achieve in a set period.

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