Harvest Moon Produce has several acres of farmland on which they grow asparagus.Asparagus takes five or more years to produce its first crop, and afterwards produces every two years.Harvest Moon grows the crop in rotation so they will have product every year.The costs that Harvest Moon undertakes to maintain the non-producing acreage in a given year should be charged to:

Question

Quizplus · Accepted Answer

The costs incurred by Harvest Moon Produce to maintain non-producing acreage are considered deferred costs. These are costs that are not expensed immediately but are carried on the balance sheet as an asset and expensed over time, in this case, over the period in which the asparagus crop will produce income. This approach matches the costs with the revenues they help to generate, adhering to the matching principle in accounting.

Harvest Moon Produce Has Several Acres of Farmland on Which