Which of the following statements is correct concerning product costs?
A)Product costs are expensed in the period the related product is sold.
B)Product costs are expensed in the period incurred.
C)Product costs are shown with operating expenses on the income statement.
D)Product costs are shown with current liabilities on the balance sheet.

Question

Quizplus · Accepted Answer

Product costs are capitalized as inventory on the balance sheet and are expensed as cost of goods sold in the period the related product is sold. This matches the cost of the product with the revenue it generates.

Which of the Following Statements Is Correct Concerning Product Costs