Which of the following is true of expired costs?
A) Expired costs are reported as fixed assets on a company's balance sheet.
B) Expired costs are added to revenue to determine income on the income statement.
C) Expired costs are used up in the production of revenue.
D) Expired costs are recognized as liabilities on the balance sheet.

Question

Quizplus · Accepted Answer

Expired costs are costs that have been used up in the production of revenue, such as raw materials, depreciation of equipment, or salaries of employees. They are not reported as assets on the balance sheet nor added to revenue to determine income on the income statement. They are not recognized as liabilities since they do not require future payment.

Which of the Following Is True of Expired Costs