Explain why product costs are capitalized but period costs are expensed in the current accounting period.

Q: period cost shown in statement of financial position Ture or false

A: Period cost refers to the cost related to the passage of time. Since it is associated with the…

Q: What is the rationale behind treating period costs as current expenses? a. Period costs are…

A: Period cost is the cost which is incurred during an accounting year but not directly related to…

Q: Explain the following basic principles in cost management: a. profits b. life cycle costs c.…

A: basic principles in cost management explained Indirect costs Expenses which are  not readily…

Q: production cost is liability or equity?

A: Production or cost of the product shall refer to the cost incurred by the business of making the…

Q: In a restated set of financial statements prepared in accordance with the current cost accounting,…

A:

Q: Explain two reasons why uncontrollable costs are included in the income statement

A: Introduction:- Uncontrollable costs are cannot be avoided. Which are necessary for production of…

Q: Why is the Modified Accelerated Cost Recovery System not generally accepted for financial accounting…

A:

Q: In a restated set of financial statements prepared in accordance with the current cost accounting,…

A: Unrealized profit is the part of profit which is not realized till the end of the accounting year.…

Q: Explain and evaluate the eff ects on financial statements and ratios of capitalizing versusexpensing…

A: Capitalizing Costs: When any cost is incurred with respect to any asset which will provide long-term…

Q: Why is it that product costs are distinguished from period costs?

A: Product cost is the cost that is incurred to manufacture the product. The product cost will include…

Q: Product costs are ordinarily found in the traditional Income Statement's Operating Expenses whereas…

A: Product costs are those costs which are incurred on specific products like material cost, labour…

Q: Period cost shown in statement of financial position. True or false

A: The period costs are the costs that are incurred in the period they are expensed.

Q: What is Re-order quantity? What is Re-order level? What is Maximum stocklevel? With respect to…

A: Inventory management consist of various levels namely re-order level, re-order quantity, maximum and…

Q: Why would reclassifying period costs as product costs increase this period’s reported earnings?

A:

Q: How can the amounts shown on the- nancial statements be called historical ?cost amounts

A: Answer A. The correct answer is option (C) When an item was originally obtained whether that…

Q: An example of an expense classifi cation by function is: C . cost of goods sold.

A: Expenses are either classified by nature or by function.

Q: What are restructuring costs and where are they reported in the income statement?

A: Definition: Income statement: The financial statement which reports revenues and expenses from…

Q: What are the differences in the accounting forinventoriable versus period costs?

A: Cost:   Cost can be defined as the cash and cash equivalent which is incurred against the products…

Q: Is it possible for costs such as salaries or depreciation to end up as assets on the balance…

A: Balance sheet: Balance Sheet is one of the financial statements that summarize the assets, the…

Q: Describe why base measurement on historical costs?

A: Definition: Historical cost: Historical cost explains that assets and liabilities appear in the…

Q: Explain and evaluate the effects of capitalizing versus expensing costs in the period in which they…

A: Capitalization : When a company incurs any expense, benefit of which will be available for more than…

Q: If a company capitalizes costs that should be expensed, how is its income statement for the…

A: A capitalized cost seems to be an element that is added to the cost structure of a fixed asset on a…

Q: Product costs are deducted from revenue a. As expenditures are made b. When product is completed c.…

A: Product costs are costs and expenses related to production and manufacturing of goods in the…

Q: Costs that are treated as assets until the product is sold are called O A. Conversion cost B.…

A: The correct answer in the given question is: (D) Product Costs

Q: As inventoriable costs expire, they become a. sales b. cost of goods sold c. operating expenses d.…

A: Cost Accounting: It is the process of collecting, recording, analyzing the cost, summarizing cost,…

Q: What are opportunity costs? Explain why opportunity costs are not recorded in financial accounting…

A: Opportunity cost is the value or benefit of the next best alternative given up when making a choice.…

Q: What is life-cycle and/or full-cost accounting? IS THERE A DIFFERENCE?

A: In this question, we have to tell about life-cycle costing and full cost accounting, whether these…

Q: What is the difference between the methods of calculating cost of goods, periodic vs perpetual?

A: Inventory: Inventory refers to the goods purchased or material purchased and manufactured which is…

Q: The cost that is incurred in the process of generating the income will be called as

A: The cost that is incurred in the process of generating the income will be called as expense.

Q: How do the accounting treatment of capital expenditures differ from thetreatment of manufacturing…

A: Capital expenditures are those expenditures which will provide benefit to the business in future…

Q: Costs that are treated as assets until the product is sold are

A: Asset is a resource from which a entity expects future economic benefits from usage of such asset.

Q: Is Historical Cost measurement concept is still relevant to account for majority of the company…

A: Historical Cost Measurement Concept  In this concept valuation of the cost of an assets which are…

Q: The income statement of a service-sector firm reports: both period and inventoriable costs a O…

A: The income statement which deals with inventory includes both period cost and product cost. but…

Q: The terms period cost and product cost are sometimes used to describe certain items in financial…

A: Definition and distinguishing of the terms- a) Product Cost- these are all the direct cost…

Q: What are the drivers to the cost of revenue

A: The total cost of producing and delivering a product or service to customers is known as the cost of…

Q: What is the cost constraint, and how does it affect financial reporting?

A: Under financial accounting, constraints are referred to as boundaries or guidelines prescribed in…

Q: When is depreciation a product cost? When is depreciation a period cost Please Explain both briefly

A: 1. Depreciation Expenses - Depreciation Expenses are the expense incurred on the wear and tear of…

Q: 12. Costs that are treated as assets until the product is sold are called: a. product costs b.…

A: The question is based on the concept of Cost Accounting. As per the Bartleby guidelines we are…

Q: When an entity prepares financial statements in a current cost basis, how is the cost of goods sold…

A: Financial statement: It is the representation of financial data of the company. It shows the…

Q: Costs of a product that are regarded as an asset for financial reporting under GAAP are called

A: Cost of product are regarded as an asset if the product is not yet sold. Product cost are also known…

Q: When preparing cost estimates for account analysis purposes, should the costs be extracted from the…

A: Cost estimation is essential for every company to help managers in relevant decision-making. Cost…

Q: Period costs include: a. current liabilities on the balance sheet b. operating costs that are shown…

A: Period costs are costs other than Product Costs incurred by an entity. These Costs generally include…

Q: Costs incurred to earn revenue are referred to as _____

A: Expenditure is the outflow cash or incurred by the business to support the generation of revenue.…

Q: The terms period cost and product cost are sometimes used to describe certain items in financial…

A: The expenses specifically associated with the manufacture of a good or service planned for sale are…