Question

Distinguish between inventorieblecons and period com OA Inventore include direct manufacturing more and direct marching could overhead)cole and we expenses incurred frough the cost of goods sold out OB Inventore include materials and are recommend OC Inventore or loss of goods purchased that we were OD Inventore costs we cost of product that we considered as the balance when they were

Answer 1

Inventoriable costs are all costs of a product that are considered as assets in the balance sheet when they are incurred and that becomes cost of goods sold when the product is sold. Period costs are are all costs of the income statement other than cost of goods sold. Period costs are treated as expenses of the accounting period in which they are incurred because they are expected to not benefit for futire periods. Inventory is a current asset that is showing on the balance sheet. So when inventory is purchased and remain unsold, all costs related to it is recorded as asset and when they are sold, it is transferred to cost of goods sold in income statement. Period costs are costs other than cost of goods sold like electricity charges, rent expense, salary etc.

Hence, option D is the correct answer.

SUMMARY:

Option D is the correct answer.