Product Costs Include Direct Materials, Direct Labor, and Selling Costs

question 114

True/False

Product costs include direct materials, direct labor, and selling costs.

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Definitions:

Revenue Accounts

Accounts that track the income a company generates from its normal business activities, typically from the sale of goods and services to customers.

Expense Accounts

Accounts used to record the consumption of economic benefits during the operational period, contributing to revenue generation.

Income Summary

An account used in the closing process that summarizes revenues and expenses for a period before transferring the balance to retained earnings.

Revenue Account

An account that tracks the income earned by a company from its normal business operations, excluding expenses.