Like product costs, selling and administrative costs cannot be recognized as an expense until inventory has been sold.

Question

Quizplus · Accepted Answer

Selling and administrative costs are typically recognized as expenses in the same period in which they are incurred, regardless of whether or not inventory has been sold. This is because these costs are not directly related to the production or acquisition of inventory, and are instead considered part of the general operating expenses of a business.

Like Product Costs, Selling and Administrative Costs Cannot Be Recognized