Product costs are expensed ________.
A) when the products are consumed or sold
B) when the accounting period they are incurred in comes to an end
C) when the products are transferred to the Work-in-Process Inventory account
D) when the market value of products goes above the recorded value

Question

Quizplus · Accepted Answer

Product costs are expensed when the products are consumed or sold. This is in accordance with the matching principle in accounting, which requires that expenses be recognized in the same period as the revenues they help generate. Therefore, the cost of producing a product is only recognized as an expense when the product is sold or used up.

Product Costs Are Expensed ________