Which of the following is TRUE of period costs?
A)They are also called fixed costs.
B)They are part of the cost of goods sold.
C)They are expected to benefit future periods.
D)They are costs incurred to generate revenue in a specific time period except the cost of manufacturing accumulated as cost of goods sold.
E)For merchandising sector companies they include all costs not related to the cost of goods purchased for resale.

Question

Quizplus · Accepted Answer

Period costs are costs incurred to generate revenue in a specific time period except the cost of manufacturing accumulated as cost of goods sold. They are expensed in the period in which they are incurred and do not become part of inventory or cost of goods sold. Examples include selling expenses and administrative expenses.

Which of the Following Is TRUE of Period Costs