Which of the Following Correctly Describes the Accounting for Administrative

question 137

Multiple Choice

Which of the following correctly describes the accounting for administrative expenses of a manufacturing company?

• A) Administrative expenses are product costs and are expensed as incurred.
• B) Administrative expenses are period costs and are expensed as incurred.
• C) Administrative expenses are product costs and are expensed when the manufactured product is sold.
• D) Administrative expenses are period costs and are expensed when the manufactured product is sold.

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Definitions:

Standard of Care

A legal benchmark indicating the level of attention, caution, and prudence someone must exercise under particular circumstances.

Court

A governmental institution authorized to settle disputes between parties, interpret laws, and administer justice in legal cases.

Professional

An individual with specialized skills and knowledge who adheres to the standards and ethics of a particular profession.

Negligence Action

A legal claim brought against someone who fails to take reasonable care, resulting in harm or damage to another person.