Product costs could be reported as assets.

Name: Product costs could be reported as assets.
Brand: Quizplus
Rating: 4.9 (44 reviews)

Question

Quizplus · Accepted Answer

Product costs include direct materials, direct labor, and manufacturing overhead. These costs are necessary to create a product, and therefore they can be capitalized as assets on the balance sheet until the product is sold. Once the product is sold, the costs are recognized as expenses in the income statement.

Product Costs Could Be Reported as Assets