For external reporting ________.
A) costs are classified as either inventoriable or period costs
B) costs reflect current values
C) there are no prescribed rules since no one is exactly sure how investors and creditors will use these numbers
D) costs include amounts that reflect both current and future benefits

Question

Quizplus · Accepted Answer

External reporting follows generally accepted accounting principles (GAAP) which classifies costs as either inventoriable or period costs. Inventoriable costs are those that are associated with the production of goods or services, and are recorded as assets until the goods are sold. Period costs are those that are not associated with the production of goods or services, and are expensed in the period they are incurred.

Answer: D
 External reporting also includes amounts that reflect both current and future benefits. This is because some costs, such as research and development or advertising expenses, may not result in immediate benefits but will contribute to the future success and profitability of the business. Therefore, these costs are capitalized and recorded as assets on the balance sheet and are recognized as expenses over time through amortization or depreciation.

For External Reporting ________