Which of the Following Statements About Period Costs Is True

question 107

Multiple Choice

Which of the following statements about period costs is true?

• A)Most period costs are expensed in the period the costs are incurred.
• B)Period costs are expensed when the products associated with these costs are sold.
• C)Period costs are usually recorded as assets.
• D)Period costs do not adhere to the matching principle.

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Definitions:

Freight-In

The cost associated with transporting goods into a warehouse or business, typically included in the cost of goods sold (COGS).

Beginning Inventory

refers to the value of inventory on hand at the start of an accounting period.

Purchase Discounts

Reductions in price given by a supplier to a buyer for prompt payment of their invoice.

Unearned Revenue

Money received by a business for goods or services yet to be delivered or performed; it is recorded as a liability on the balance sheet.