Which of the Following Statements Is True

question 31

Multiple Choice

Which of the following statements is true?

• A) Product costs affect only the balance sheet.
• B) Product costs affect only the income statement.
• C) Period costs affect only the balance sheet.
• D) Neither product costs nor period costs affect the Statement of Retained Earnings. This can also be a true statement if the period costs were prepaid (i.e., prepaid advertising, depreciation).
• E) Product costs eventually affect both the balance sheet and the income statement.

---

Definitions:

Context

The circumstances or setting surrounding an event, statement, or idea which gives it additional meaning.

Audience

A group of spectators or listeners, especially those gathered to watch, listen to, or read something.

Leptin

A hormone that, when released into the bloodstream, signals the hypothalamus that the body has had enough food and reduces the appetite while increasing the feeling of being full.

Incentive Approaches

Theories of motivation in which behavior is explained as a response to the external stimulus and its rewarding properties.