An EXCEPTION to the General Rule That Costs Should Be

question 83

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 inventory.
• D) sales commission and salary costs incurred in connection with the sale of inventory.

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Definitions:

Sole Proprietor

An individual who owns and operates a business alone, bearing sole responsibility for its debts and liabilities.

Education Expenses

Costs associated with schooling or training, including tuition, books, and supplies, that may be eligible for tax deductions or credits.

Law School

An educational institution specializing in the study of law, preparing students to practice as attorneys.

CPA Exam

A standardized test that must be passed to become a licensed Certified Public Accountant in the United States.