A product cost may be described as a cost incurred to create or acquire a good or service. A period cost may be described as a cost that provides benefit for a specific time period. Product costs by definition have not yet expired [assets]; period costs by definition are expired costs [expenses].

Each time a student registers for a course the student is assessed a tuition [registration] charge. Given the descriptions of product costs and period costs, how should this tuition assessment [cost] be classified at the end of the academic term the course is offered? Explain the reasoning behind your classification.