Like product costs are not necessarily treated as expenses in the period in which they are incurred?

Like product costs, which include direct materials, labor, and overhead, are initially capitalized as inventory on the balance sheet rather than being treated as expenses immediately. These costs are only recognized as expenses when the inventory is sold, at which point they are recorded as cost of goods sold (COGS) on the income statement. This matching principle aligns expenses with revenues, providing a clearer picture of profitability for a given period. Thus, the treatment of these costs reflects the timing of their impact on financial statements.