What Are Period Costs?. Are you looking for information about which of the following is not a period cost ? You have come to the right website. Because on this website we will review about which of the following is not a period cost. Hopefully the information we provide is useful for those of you who are looking for information about which of the following is not a period cost.
Let’s look at the article below which will briefly discuss which of the following is not a period cost.
Period costs are the costs of doing business that are incurred and expensed in the same period. This type of cost is also referred to as a period expense or period expense.
Period costs are usually recorded on the income statement and are related to the day-to-day operations of the business. Examples of period costs include the cost of advertising, office supplies, and rent. All of these costs are expensed when incurred and do not become part of the cost of inventory.
Period costs are incurred directly from the sale of goods and services. In other words, they are related to the current period of operations and are not included in the cost of goods sold. For example, if a company purchases office supplies and pays rent each month, those costs are period costs.
Which of the Following is Not a Period Cost?
The most common period costs are advertising, office supplies, and rent. However, there are other types of costs that are not classified as period costs. These costs include depreciation and amortization, which are non-cash expenses. Additionally, interest expenses are also not period costs because they are not directly related to the sale of goods and services.
Depreciation is an expense that is used to spread the cost of a long-term asset over its useful life. This type of expense is not considered a period cost, as it does not relate directly to the sale of goods and services. Amortization is similar to depreciation, but it is used to spread the cost of intangible assets, such as patents and copyrights, over their useful life. Interest expenses, such as the cost of borrowing money, are not period costs because they are not related to the sale of goods and services.
Conclusion
In conclusion, period costs are costs that are incurred and expensed in the same period. Examples of period costs include advertising, office supplies, and rent. These costs are expensed when incurred and do not become part of the cost of inventory. The most common non-period costs are depreciation, amortization, and interest expenses.
It is important to understand the different types of costs so that you can properly manage your business. Period costs are the costs of doing business that are incurred and expensed in the same period. Non-period costs, such as depreciation, amortization, and interest expenses, are not considered period costs.
By understanding the different types of costs, you can better manage your business and ensure that you are meeting your financial goals. Knowing which costs are period costs and which are non-period costs will help you make better decisions and improve your bottom line.
