Question

The specific identification method of inventory costing may enable management to manipulate net income. always minimizes a company's net income. has no effect on a company's net income. always maximizes a company's net income.

Answer 1

Answer: May enable management to manipulate net income

Explanation:

The Specific Identification method does in fact allow for some manipulation most especially when there are items that are identical but yet are not of the same cost.

To most customers, the items will be the same and therefore the retailer or management could just report selling an item of higher cost in order to lower paper profit and by extension net income.

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