- 1 Marks
Question
In accordance with SAS 4, which ONE of the following methods is appropriate in valuation of stock?
- A. Latest in, first out
- B. Base stock
- C. Specific identification
- D. Latest purchase price
- E. Weighted average
Answer
C
Explanation: The answer is C. Specific identification. According to SAS 4, the specific identification method is appropriate for valuing stock when items can be individually identified and traced. This method is suitable for high-value or unique items, where each item’s cost can be matched with its sale, ensuring accurate stock valuation.
- Tags: Financial Reporting, Inventory Methods, SAS 4, Stock valuation
- Level: Level 3
- Uploader: Dotse