Which of the following statements is true regarding manufacturing costs?
A) They will be appear on the income statement as the product is made.
B) They will not appear on the income statement or the balance sheet until the product is completed.
C) They will appear on the balance sheet as an inventory cost until the product is sold.
D) They will appear on the balance sheet as an inventory cost after the product is sold.

Question

Quizplus · Accepted Answer

Manufacturing costs, including direct materials, direct labor, and manufacturing overhead, are initially recorded as inventory costs on the balance sheet. They do not appear on the income statement until the product is sold, at which point they are transferred from inventory to cost of goods sold.

Which of the Following Statements Is True Regarding Manufacturing Costs