Costs that flow directly to the current income statement are called:
A) Period costs.
B) Product costs.
C) General costs.
D) Balance sheet costs.
E) Capitalized costs.

Question

Quizplus · Accepted Answer

Period costs are expenses that are incurred during a specific period, such as salaries, rent, and marketing expenses, and are charged to the current income statement. Product costs, on the other hand, are incurred during the production process and are assigned to the products being manufactured. General costs are overhead expenses that cannot be directly attributed to a product or service, while balance sheet costs and capitalized costs are not expenses that flow directly to the current income statement.

Costs That Flow Directly to the Current Income Statement Are