Asked by michelle hopkins on Jul 20, 2024
Verified
As inventoriable costs expire they become
A) selling expenses.
B) gross profit.
C) cost of goods sold.
D) sales revenue.
Inventoriable Costs
Costs associated with obtaining or manufacturing products intended for sale, including materials, labor, and certain overhead expenses.
Cost of Goods Sold
The direct costs attributable to the production of goods sold by a company, including materials, labor, and overhead.
Sales Revenue
The total amount earned from the sale of goods or services before deducting any expenses, discounts, and returns.
- Comprehend the categorization of expenses into inventoriable or period costs and their influence on financial statements.
Verified Answer
TG
Terry GregoryJul 21, 2024
Final Answer :
C
Explanation :
In accounting, inventoriable costs are the expenses that are associated with the production or purchase of goods. These costs are initially recorded as inventory on the balance sheet, but as the goods are sold or used, they become expenses on the income statement through the cost of goods sold (COGS) account. Therefore, as inventoriable costs expire, they become part of the COGS, making option C the correct answer.
Learning Objectives
- Comprehend the categorization of expenses into inventoriable or period costs and their influence on financial statements.