- CFA Exams
- CFA Level I Exam
- Topic 4. Financial Statement Analysis
- Learning Module 2. Analyzing Income Statements
- Subject 2. Expense Recognition - Inventory
CFA Practice Question
Product costs are directly matched against revenues while period costs are not. True or False?
Correct Answer: True
A cost that can be directly matched against related revenues is a product cost. Period costs, on the other hand, cannot be directly traced to revenues. Period costs are recorded as expenses in the time period assumed to be benefited.
User Contributed Comments 2
| User | Comment |
|---|---|
| kalps | Product cost - directly matched against revenues Period costs - cannot be directly matched against revenues |
| teddajr | Period costs are expensed over the useful period. |