What is the general approach as to when product costs are recognized as expenses?
A) In the period when the expenses are paid.
B) In the period when the expenses are incurred.
C) In the period when the vendor invoice is received.
D) In the period when the related revenue is recognized.

Question

Quizplus · Accepted Answer

Product costs are recognized as expenses in the period when the related revenue is recognized, according to the matching principle in accounting. This principle dictates that expenses should be matched with the revenues they help to generate.

What Is the General Approach as to When Product Costs