Costs that are initially recorded as assets and expensed when sold are called:
A)period costs
B)inventoriable costs
C)variable costs
D)fixed costs

Question

Quizplus · Accepted Answer

Costs that are initially recorded as assets and expensed when sold are called inventoriable costs. This includes costs such as direct materials, direct labor, and manufacturing overhead that are incurred in the production of goods. These costs are added to the cost of inventory until the inventory is sold, at which point they are expensed as cost of goods sold. Period costs, on the other hand, are expensed in the period in which they are incurred, such as selling and administrative expenses. Variable and fixed costs are types of cost behavior, not related to whether costs are inventoriable or period costs.

Costs That Are Initially Recorded as Assets and Expensed When