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    BellyDancer068's Avatar
    BellyDancer068 Posts: 1, Reputation: 1
    New Member
    		  
    #1

    Apr 6, 2008, 03:38 PM
    Confusion on creating income statement
    For my homework I am given info about inventory transactions and told the company uses the periodic method of accounting.

    I am to "prepare partial income statements through gross profit and calculate the value of ending inventory that would be reported on the balance sheet, under each of the following cost flow assumptions."

    The 3 assumptions are:

    1. Specific identification method
    (assumptions listed below)

    2.FIFO
    3.LIFO


    I understand the FIFO/LIFO part, what does it mean by specific identification method?



    Thanks.
    CaptainForest's Avatar
    CaptainForest Posts: 3,645, Reputation: 393
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    #2

    Apr 6, 2008, 07:16 PM
    Source: Specific Identification Inventory Valuation Method Glossary Definition: Taxes - MSN Money

    Specific Identification Inventory Valuation Method

    "A method of tracking inventory when each item can be identified. Specific identification is usually used for large, easily traceable items, such as vehicles or furniture. If tracking individual inventory items is not practical, you can value your inventory using another method, such as the last-in, first-out method (LIFO) or the first-in, first-out method (FIFO.)"
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