Which of the Following Statements Is True Regarding Manufacturing Costs

question 16

Multiple Choice

Which of the following statements is true regarding manufacturing costs?

• A) They will be appear on the income statement as the product is made.
• B) They will not appear on the income statement or the balance sheet until the product is completed.
• C) They will appear on the balance sheet as an inventory cost until the product is sold.
• D) They will appear on the balance sheet as an inventory cost after the product is sold.

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Definitions:

Positive Statement

An objective statement based on facts and evidence that can be tested and verified.

Value Judgment

An assessment based on personal views, ethical standards, or aesthetics, rather than on measurable or objective criteria.

Deduction

An amount that is subtracted from someone's gross income, reducing the taxable income and thus the amount of tax owed.

Induction

A reasoning process that involves making generalizations based on specific observations or instances.