All costs incurred in a merchandising firm are considered to be period costs.

Question

Quizplus · Accepted Answer

In a merchandising firm, costs can be classified into two categories: product costs and period costs. Product costs include the costs associated with producing or purchasing the goods sold and are considered inventory costs that are expensed when the goods are sold. Period costs, on the other hand, are not directly related to the production or purchase of goods and are expensed in the period they are incurred, such as selling, general, and administrative expenses. Therefore, not all costs in a merchandising firm are considered period costs, and the statement is false.

All Costs Incurred in a Merchandising Firm Are Considered to Be