Period costs are all costs of a product that are considered as assets in the balance sheet when they are incurred and that become cost of goods sold only when the product is sold.

Question

Quizplus · Accepted Answer

Period costs are expensed on the income statement in the period in which they are incurred, rather than being capitalized and included in the cost of the product. They are not considered as assets on the balance sheet and do not become cost of goods sold when the product is sold. Examples of period costs include selling expenses, administrative expenses, and research and development costs.

Period Costs Are All Costs of a Product That Are