Which of the following statements is true?
A) Product costs and design costs are interchangeable terms.
B) Inventoriable costs are assigned to inventories under GAAP.
C) Manufacturing costs are a special case of period costs.
D) Intangible costs refer to a particular cost of a product.

Question

Quizplus · Accepted Answer

Inventoriable costs are costs that are directly related to the production of a product and are assigned to the inventory until the product is sold. GAAP (Generally Accepted Accounting Principles) requires that these costs be assigned to the inventory and not be expensed until the product is sold. Therefore, option B is true. Option A is incorrect because design costs are not the same as product costs; design costs are expenses incurred during the design of a product. Option C is incorrect because manufacturing costs and period costs are two different types of costs. Manufacturing costs are costs incurred during the production of a product, while period costs are expenses that are not a part of the production process. Option D is incorrect because intangible costs are not a specific cost of a product; rather, they are a type of cost that reflects something that has value but is not physical, such as goodwill or intellectual property.

Which of the Following Statements Is True