Solution Manual For Fundamentals of Cost Accounting 5th Edition By Lanen

Chapter 02

Cost Concepts and Behavior

True / False Questions

1. The cost of an item is the sacrifice of resources made to acquire it.

True False

2. An expense is a cost charged against revenue in an accounting period.

True False

3. If a cost is recorded as an asset (for example, prepaid rent for an office building), it becomes an
expense when the asset has been consumed.

True False

4. Accounting systems typically record opportunity costs as assets and treat them as intangible
items on the financial statements.

True False

5. Total cost of goods purchased minus beginning merchandise inventory plus ending merchandise
inventory equals cost of goods sold.

True False

6. Cost of goods sold includes the actual costs of the goods sold and the costs required to sell them
to the customer.

True False