Costs that can be reasonably associated with specific revenues but NOT with specific products should be
A) charged to expense in the period incurred.
B) allocated to specific products based on the best estimate of the production processing time.
C) expensed in the period in which the related revenue is recognized.
D) capitalized and then amortized over a period not to exceed 60 months.

Question

Quizplus · Accepted Answer

Costs that can be reasonably associated with specific revenues but NOT with specific products, such as advertising expenses or sales commissions, should be expensed in the period in which the related revenue is recognized according to the matching principle of accounting. This principle requires that expenses be recognized in the same period as the revenue they helped to generate in order to provide a more accurate picture of the company's profitability.

Costs That Can Be Reasonably Associated with Specific Revenues but NOT