Inventoriable costs are reported as an asset when incurred and expensed on the income statement when the product is sold.

Question

Quizplus · Accepted Answer

This is the correct accounting treatment for inventoriable costs under the accrual basis of accounting. These costs are initially recorded as an asset on the balance sheet and are expensed on the income statement when the product is sold. This helps to match the costs with the revenue generated from the sale of the product, providing a more accurate representation of the company's financial performance.

Inventoriable Costs Are Reported as an Asset When Incurred and Expensed