All costs reported on the income statement of a service-sector company are period costs.

Question

Quizplus · Accepted Answer

Period costs are costs that are not directly related to the production or sale of goods, but are incurred over a specific period of time (such as salaries, rent, marketing expenses, etc.). These costs are expensed on the income statement in the period in which they are incurred. Since service-sector companies typically do not produce tangible goods, all of their costs are period costs.

All Costs Reported on the Income Statement of a Service-Sector