An Exception to the General Rule That Costs Should Be

question 72

Multiple Choice

An exception to the general rule that costs should be charged to expense in the period incurred is

• A)factory overhead costs incurred on a product manufactured but not sold during the current accounting period.
• B)interest costs for financing of inventories that are routinely manufactured in large quantities on a repetitive basis.
• C)general and administrative fixed costs incurred in connection with the purchase of
• D)sales commission and salary costs incurred in connection with the sale of inventory.

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Definitions:

Voting Shares

Shares that give the shareholder the right to vote on important issues such as electing directors and approving mergers.

Credit Balance

A situation in an account where the amount of credits exceeds the amount of debits, indicating that money is owed to the account holder.

Common Stock

Equity securities that represent ownership in a corporation, with voting rights and potential for dividends.