in some cases, the cost of goods sold may be identified with the item sold. ordinarily, however, the identity of goods is lost between the time of purchase or manufacture and the time of sale. determining which goods have been sold, and the cost of those goods, requires either identifying the goods or using a convention to assume which goods were sold. this may be referred to as a cost flow assumption or inventory identification assumption or convention. the following methods are available in many jurisdictions for associating costs with goods sold and goods still on hand: