Which of the Following Costs Should Not Be Recorded as an Expense

question 118

Multiple Choice

Which of the following costs should not be recorded as an expense in the period incurred?

• A) Insurance on factory building
• B) Sales commissions
• C) Product shipping costs
• D) Product advertising

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Definitions:

Circumstances

Circumstances refer to the specific conditions or facts affecting a situation, event, or decision-making process at a given time.

Goodwill

An intangible asset that arises when a business is purchased for more than the fair market value of its net assets, reflecting the value of the business’s reputation, brand, and other unquantifiable assets.

Acquiree

A company that has been bought or acquired by another company.

Business Combination

The process of bringing together separate companies or entities into one larger organization through mergers, acquisitions, or consolidations.