When Deciding How to Account for Research and Development Costs

question 70

Multiple Choice

When deciding how to account for research and development costs, FASB had to choose between

• A)predicative value and timeliness
• B)verifiability and neutrality
• C)relevance and reliability
• D)understandability and decision usefulness

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Definitions:

Demographic Transition

A model describing the transformation of countries from having high birth and death rates to low birth and death rates as a country develops from a pre-industrial to an industrialized economic system.

Mortality

The state of being mortal or the incidence of death within a population.

Economic Growth

An increase in the production of goods and services in an economy over a period of time, often measured as the percentage increase in real gross domestic product (GDP).

Postindustrial Period

a stage in societal development that occurs after the industrial period, characterized by an economy focused more on services than on manufacturing.