Imagine FASB Passes a New Rule That Required the Capitalization

question 17

Multiple Choice

Imagine FASB passes a new rule that required the capitalization of R&D. The effect for a drug company would be to:

• A)increase its current ratio.
• B)decrease debt to equity ratio.
• C)decrease working capital.
• D)improve asset turnover.

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Definitions:

Obstetrician

A medical doctor specializing in the care of women during pregnancy, childbirth, and the postpartum period.

Cephalocaudal

A pattern of growth and development in which areas of the body develop from head (cephalo) to tail (caudal) direction.

Proximodistal

A pattern of physical and motor development that progresses from the center of the body outward toward the extremities.

Upper-Arm Movement

The action or range of motion associated with the segment of the arm located between the shoulder and the elbow.