Which of the following correctly describes the accounting for advertising costs?
A) Advertising costs are product costs and are expensed as incurred.
B) Advertising costs are period costs and are expensed as incurred.
C) Advertising costs are product costs and are expensed when the manufactured product is sold.
D) Advertising costs are period costs and are expensed when the manufactured product is sold.

Question

Quizplus · Accepted Answer

Advertising costs are considered period costs because they are not directly related to the production of goods or services. Therefore, they are expensed as incurred and do not become part of the cost of the product.

Which of the Following Correctly Describes the Accounting for Advertising