Which of the Following Statements Concerning Product and Period Costs

question 30

Multiple Choice

Which of the following statements concerning product and period costs is incorrect?

• A) The basis of the distinction between product and period costs is the timing of the recognition of an expense in the income statement.
• B) Service businesses have both period and product costs.
• C) Product costs are included in the cost of inventories until the products are sold.
• D) Period costs are not directly required to produce the product.

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Definitions:

Boston Massacre

A clash between British soldiers and Boston colonists in 1770, where five colonists were killed, marking a critical point leading to the American Revolution.

Sons of Liberty

A group of American patriots in the colonial period who organized against British taxation and policies, playing a significant role in the American Revolution.

British Court

The system of courts and legal institutions in the United Kingdom, or the royal court associated with the British monarchy.

John Wilkes

An 18th-century British politician and journalist known for his radical views, defense of liberty, and challenges to the government's authority.