Final answer:
The true statement about costs is that expired costs that do not produce any benefit can result in a loss. Unexpired costs are not called expenses but are considered assets and represent future economic benefits. Understanding the difference between unexpired and expired costs, as well as fixed and variable costs, is key in business accounting.
Step-by-step explanation:
To answer the question of which statement is true of costs, it is important to understand different types of costs. The statement that unexpired costs are called expenses is incorrect; unexpired costs are actually costs that have not yet been incurred and therefore are not recognized as expenses. They are considered assets since they represent potential future economic benefits. Expired costs, on the other hand, are costs that have been incurred in generating revenue, and as such, they are recorded as expenses. When expired costs do not contribute to the generation of revenue, they can indeed result in a loss.
For clarification, fixed costs are costs that do not change with the level of production, such as rent or machinery costs, and these are often associated with the assets or expenditures necessary to facilitate production capacity. Variable costs change with production levels, such as materials and labor directly involved in producing goods or services. The distinction between explicit costs and implicit costs is also crucial. Explicit costs are direct out-of-pocket expenses, whereas implicit costs reflect the opportunity cost of using the resources the firm already owns.