An organization that provides external reporting to shareholders is not required to show a television advertising cost as an expense for the product in the income statement in the year that those costs are incurred.

Question

Quizplus · Accepted Answer

For external reporting to shareholders,television advertising costs for this product are fully expensed in the income statement in the year they are incurred.However,for internal purposes of evaluating management performance,the television advertising costs could be capitalized and then amortized or written off as expenses over several years.

An Organization That Provides External Reporting to Shareholders Is Not