Which of the following statements is correct concerning product costs?
A) Product costs are expensed in the period incurred.
B) Product costs are expensed in the period the related product is sold.
C) Product costs are shown with operating expenses on the income statement.
D) Product costs are shown with current liabilities on the balance sheet.

Question

Quizplus · Accepted Answer

Product costs are expensed in the period the related product is sold. This is because product costs are treated as inventory and are only expensed when the inventory is sold. The cost of goods sold (COGS) is then calculated by subtracting the cost of the sold inventory from the revenues generated by the sale. This approach allows for a more accurate representation of a company's profitability in a given period.

Which of the Following Statements Is Correct Concerning Product Costs