Which of the Following Statements Is True with Regard to Product

question 7

Multiple Choice

Which of the following statements is true with regard to product costs versus general, selling, and administrative costs?

• A) Product costs associated with unsold units appear on the income statement as general expenses.
• B) General,selling,and administrative costs appear on the balance sheet.
• C) Product costs associated with units sold appear on the income statement as cost of goods sold.
• D) None of these is true.

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Definitions:

Perpetual Inventory System

An inventory management system where records of inventory are updated in real-time or near real-time with every sale or purchase.

Cost Of Goods Sold

An expense reported on the income statement, representing the total cost of products sold, including the cost of materials and labor.

Perpetual Inventory System

An inventory management system where updates to inventory levels are made continuously as transactions occur, providing a real-time view of stock levels.

Accounts Payable

Accounts Payable represents short-term financial obligations owed by a business to its suppliers or creditors for goods and services received.