PRC-1 · Chapter 7 · Question 89 of 100
Which of the following best describes a 'period cost' in accounting?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) A cost that relates to a time period, is not included in inventory valuation, and is expensed immediately.
Explanation
Period costs are those not directly tied to bringing inventory to its present location/condition (e.g., admin salaries, selling expenses). They are expensed in the income statement in the period they occur.
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