1.Which statement applies to the specific identification inventory method?

1. This method is also known as the average cash flow method.
2. The ending inventory is made up of the most recent purchases.
3. Each unit sold is identified with a specific purchase.
4. This is closely related to a perpetual inventory system.

2.Why does the specific identification inventory method work well for business such as automobile dealerships?

1. The inventory keeps track of the automobiles that are first-in first-out.
2. This method works because each automobile has a unique serial number.
3. It best shows the current cash flow at all times.
4. It's the easiest method to factor the perpetual inventory costs.