Product costs are all costs of a product that the IRS requires companies to treat as an asset for external financial reporting. These costs are recorded as an asset (inventory) on the balance sheet until the asset is sold. The cost is then transferred to an expense account ( ▼ Cost of Goods Manufactured Cost of Goods Sold Inventory Expense Product Expense ) on the income statement.

The correct answer is True.

Explanation:

The three elements of the cost of production of a manufactured article are called “product costs”, because they are incorporated into the value of the products manufactured, through asset accounts and are applied to the results mediately and gradually as they are sold. products, a situation that may occur in the manufacturing and accounting period after the period during which the product costs were incurred.