The cost of inventories of items that are not ordinarily interchangeable and goods or services produced and segregated for specific projects should…

CA Intermediate · Advanced Accounting · MTP · January 2026
The cost of inventories of items that are not ordinarily interchangeable and goods or services produced and segregated for specific projects should be assigned using following cost formula
(A) By specific identification of their individual costs
(B) First-in, First-out (FIFO) Method
(C) Weighted average cost formula
(D) The formula used should reflect the fairest possible approximation to the cost incurred in bringing the items of inventory to their present location and condition.

Suggested Answer and Working Notes:

Correct Answer: Option (A)

By specific identification of their individual costs

Topics: AS 2, AS 13

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