While preparing a traditional income statement, the costs are shown into which of the two categories?

Question

Quizplus · Accepted Answer

The costs in a traditional income statement are categorized as either product costs or period costs. Product costs include direct materials, direct labor, and manufacturing overhead, which are associated with the production of goods. Period costs, on the other hand, are not related to production and include expenses such as selling, general and administrative expenses, research and development costs, etc.

While Preparing a Traditional Income Statement, the Costs Are Shown