Asked by Louie Allard on Jul 20, 2024
Verified
Period costs include
A) current assets on the balance sheet
B) current liabilities on the balance sheet
C) operating costs that are shown on the income statement when products are sold
D) operating costs that are shown on the income statement in the period in which they are incurred
Period Costs
Expenses that are not directly tied to the production process and are expensed in the period they are incurred, such as selling, general, and administrative costs.
Operating Costs
Expenses related to the operation of a business, excluding costs associated with producing goods directly.
Income Statement
A report detailing a business's earnings, expenditures, and profit during a certain timeframe.
- Recognize the importance of product costs and period costs in financial statements.
Verified Answer
GA
glorious abbeyJul 24, 2024
Final Answer :
D
Explanation :
Period costs are operating costs that are shown on the income statement in the period in which they are incurred. They are not related to the production or sale of a specific product and are expensed as incurred. Current assets and current liabilities are balance sheet items and not considered period costs.
Learning Objectives
- Recognize the importance of product costs and period costs in financial statements.