Which of the following statements about inventory cost flow assumptions is not correct?

Multiple Choice

The use of a cost flow assumption eliminates the need for separately identifying each unit sold and looking up its actual cost and results in a significant cost savings in record keeping.

When a cost flow assumption is in use, the seller makes an assumption as to the sequence in which units are withdrawn from inventory.

A company's cost flow assumption must parallel the physical movement of merchandise in and out of the company.

The use of a cost flow assumption is particularly common where the company has a large number of identical inventory items that were purchased at different prices.