1. Which of the following statements about costs and expenses is correct? a. b.
ID: 2336694 • Letter: 1
Question
1. Which of the following statements about costs and expenses is correct? a. b. c. A cost is a sacrifice of resources. Cost and expense are the same. All assets will become expenses. 2. A cost of goods sold statement for a retail business: a. Includes transportation-in costs. b. Has a cost of goods manufactured section. c. Covers a period of time. d. Both a and c 3. A period cost: a. Is also known as manufacturing cost. b. Includes both marketing and administrative costs. c. Will be expensed when products are sold. d. Is part of cost of goods soldExplanation / Answer
Answer(1): Option "a" is correct.
A cost is a sacrifice of resources.
We have to sacrifice some resources to receive the benefits in the form of final product.
Answer(2): Option "a" is correct.
A cost of goods sold statement includes "Transportation -in" cost.
It is also called Frieght-in cost and it is the part of goods purchased.
Answer(3): Option "c" is correct.
A period cost includes both marketing and admininstrative cost.
This cost is not included in COGS calculation rather it is included in Income statement.
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