How Should Research and Development Costs Be Accounted For, According

question 35

Multiple Choice

How should research and development costs be accounted for, according to a Financial Accounting Standards Board Statement?

• A)Must be capitalized when incurred and then amortized over their estimated useful lives.
• B)Must be expensed in the period incurred.
• C)May be either capitalized or expensed when incurred, depending upon the materiality of the amounts involved.
• D)Must be expensed in the period incurred unless it can be clearly demonstrated that the expenditure will have alternative future uses or unless contractually reimbursable.

---

Definitions:

Automatic Responding

Actions or reactions that occur without conscious thought, often as a result of learned behaviors or reflexes.

Mindlessness

A mental state characterized by a lack of conscious awareness or critical thinking, often resulting in automatic or habitual action without reflection.

Perceived Legitimacy

The extent to which an authority, institution, or power is regarded as justified, rightful, and acceptable.

Milgram Studies

A series of psychological experiments conducted by Stanley Milgram, which measured the willingness of study participants to obey an authority figure who instructed them to perform acts conflicting with their personal conscience.