Is advertising a period cost?
Understand the Problem
The question is asking whether advertising expenses are considered a period cost in accounting. Period costs are costs that are not tied to the production of goods and are expensed in the period incurred. Advertising is typically treated as a period cost because it occurs regardless of production.
Answer
Advertising is a period cost.
The final answer is advertising is a period cost.
Answer for screen readers
The final answer is advertising is a period cost.
More Information
Advertising costs are classified as period costs because they are not directly tied to production and are expensed in the period they are incurred.
Tips
A common mistake is misclassifying advertising costs as product costs. Remember, product costs are directly associated with production, while period costs relate to time periods.
Sources
- Product Cost vs. Period Costs: What Are the Differences? - fool.com
- Period Costs vs. Product Costs: What's the Difference? - Investopedia - investopedia.com
- Period Costs vs Product Costs - Vintti - vintti.com
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