Costs that are initially recorded as assets and expensed when goods sold are called ________.
A) period costs
B) inventoriable costs
C) irrelevant costs
D) research and development costs

Question

Quizplus · Accepted Answer

Inventoriable costs are costs that are initially recorded as assets (inventory) and expensed when goods are sold. This includes the cost of direct materials, direct labor, and manufacturing overhead. Period costs, on the other hand, are expensed in the period in which they are incurred and include administrative expenses, selling expenses, and research and development costs. Irrelevant costs are costs that do not affect decision making, while research and development costs are a type of period cost.

Costs That Are Initially Recorded as Assets and Expensed When