객관식
Family Furniture Corporation incurred the following costs: purchase of raw materials, wages for assembly workers, factory utilities, and advertising expenses. Which of the following costs would be classified as a period cost?
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1. Introduction to Accounting
Types of Accounting
객관식
Under which type of accounting are a firm's insurance premiums generally considered period costs?
A
Tax accounting
B
Cost accounting
C
Managerial accounting
D
Financial accounting
검증된 단계별 안내1
Understand the concept of period costs: Period costs are expenses that are not directly tied to the production of goods or services and are expensed in the period they are incurred. Examples include insurance premiums, rent, and administrative expenses.
Recognize the different types of accounting mentioned in the problem: Tax accounting focuses on compliance with tax laws, cost accounting deals with tracking and analyzing costs for production, managerial accounting supports internal decision-making, and financial accounting provides information for external stakeholders.
Identify the type of accounting that categorizes insurance premiums as period costs: Insurance premiums are generally considered period costs under cost accounting because they are not directly tied to the production process but are necessary for the overall operation of the business.
Clarify why other types of accounting do not categorize insurance premiums as period costs: For example, tax accounting may treat insurance premiums differently based on tax regulations, managerial accounting may focus on internal allocation, and financial accounting may classify them differently for reporting purposes.
Conclude that cost accounting is the correct type of accounting for categorizing insurance premiums as period costs, as it focuses on the classification and analysis of costs incurred during a specific period.
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