Question

Period costs are often referred to as

Operating expenses.
Neither Selling, general and administrative expenses nor Operating expenses.
Both Selling, general and administrative expenses nor Operating expenses.
Selling, general, and administrative expenses.
A. Operating expenses.
B. Neither Selling, general and administrative expenses nor Operating expenses.
C. Both Selling, general and administrative expenses nor Operating expenses.
D. Selling, general, and administrative expenses

Answer 1

Period costs include both Selling, General, and Administrative expenses and Operating expenses, and are expensed in the period they are incurred. Correct option is C.

Step-by-step explanation:

Period costs are costs that are not directly tied to the production of goods and are expensed in the period they are incurred. They include Selling, General, and Administrative expenses (SG&A), as well as all other expenses that are not involved in the manufacturing process. Operating expenses are similar in that they refer to the costs required to operate a business but can also include costs of goods sold if they are directly related to the operation. Therefore, the correct answer to the question is C. Both Selling, General, and Administrative expenses and Operating expenses.