The cost of the direct labor will be treated as an expense on the income statement when the resulting:
A)payroll costs are paid.
B)payroll costs are incurred.
C)products are completed.
D)products are solD.This solution supports the matching principle.

Question

Quizplus · Accepted Answer

The matching principle requires that expenses be recognized in the same period as the revenues they help to generate. Therefore, direct labor costs are expensed when the products are sold, aligning the cost with the revenue from the sale.

The Cost of the Direct Labor Will Be Treated as an Expense