In a manufacturing company,________.
A) inventoriable costs only become an expense when the company sells the inventory
B) inventoriable costs become an expense as soon as the company finishes manufacturing the product
C) there is only one inventory account
D) period expenses are reported as expenses in a future period

Question

Quizplus · Accepted Answer

In a manufacturing company, inventoriable costs (such as direct materials, direct labor, and manufacturing overhead) only become an expense when the company sells the inventory. Until then, these costs are recorded as assets on the balance sheet under the inventory account. Once the inventory is sold, the costs are transferred to the cost of goods sold account and become an expense.

In a Manufacturing Company,________