Which of the Following Is True of Product Costs

question 107

Multiple Choice

Which of the following is true of product costs?

• A) They are expensed in the period they are paid.
• B) For external reporting, GAAP requires that they be expensed before the products are sold.
• C) They are first recorded in an inventory account.
• D) For merchandising companies, product costs do not include freight costs.

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Definitions:

Mutually Beneficial Objectives

Goals or aims shared by two or more parties that provide advantages to all involved.

Supply Partnership

A strategic relationship between a buyer and supplier designed to achieve specific business objectives by maximizing the effectiveness of each participant's resources.

Sustainable Procurement

The acquisition process aimed at obtaining goods, services, and works in a way that achieves value for money on a whole life basis in terms of generating benefits not only to the organization but also to society and the economy, while minimizing damage to the environment.

Ecologically Sound

Practices or products that have minimal impact on the environment and promote sustainability.