If a Company Constructs a Laboratory Building to Be Used

question 58

Multiple Choice

If a company constructs a laboratory building to be used as a research and development facility, the cost of the laboratory building is matched against earnings as

• A)amortization deducted as part of research and development costs.
• B)research and development expense in the period(s)of construction.
• C)amortization or immediate write-off, depending on company policy.
• D)an expense at such time as productive research and development has been obtained from the facility.

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Definitions:

Tariff

A tax imposed by a government on goods and services imported from other countries, often used to protect domestic industries from foreign competition.

Producer Surplus

The difference between the amount producers are willing to accept for a good or service and the actual amount they receive, reflecting profits.

Deadweight Loss

A loss of economic efficiency that can occur when equilibrium for a good or service is not achieved or is unachievable.

Tariff Revenue

The income generated by a government from imposing taxes on imported goods.