All of the Following Costs Should Be Charged to Expense

question 87

Multiple Choice

All of the following costs should be charged to expense in the period in which they are incurred EXCEPT for

• A)manufacturing overhead costs for a product manufactured and sold in the same
• Accounting period.
• B)costs which will not benefit any future period.
• C)costs from idle manufacturing capacity resulting from an unexpected plant shutdown.
• D)costs of normal shrinkage and scrap incurred for the manufacture of a product in ending
• Inventory.

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Definitions:

Exchange Gain/Loss

A financial result that occurs when the value of foreign currency transactions changes due to fluctuations in exchange rates between the initial transaction and settlement dates.

Functional Currency

The primary currency of the primary economic environment in which an entity operates, used in its financial reporting.

Dividends

Payments made by a corporation to its shareholder members, distributing a portion of the company’s earnings.

Exchange Rates

The rate at which one currency can be exchanged for another currency, used in global transactions and currency conversion.