Development Costs

question 94

Multiple Choice

Development costs

• A) are always expensed when incurred.
• B) cannot be recorded separately from research costs.
• C) can be capitalized if it can be shown that the costs will provide future benefits.
• D) are intangible assets that are not amortized.

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Definitions:

Opportunity Costs

The cost of forgoing the next best alternative when choosing among multiple options, measuring the trade-off involved in any decision.

Opportunity Cost

The value of the best alternative forgone when a choice is made, representing the benefits one could have received by taking an alternative action.

Gains From Trade

The benefit that entities receive from engaging in voluntary trade, often resulting in better allocation of resources and increased efficiency.

Comparative Advantage

The proficiency of an entity, whether it's an individual, corporate body, or state, to create a good or offer a service at a more economical opportunity cost than its competition.