Which of the Following Statements Concerning Research and Development Costs

question 58

Multiple Choice

Which of the following statements concerning research and development costs is not true?

• A)All research costs should be expensed as incurred.
• B)Development costs with probable future benefits should be capitalized.
• C)All development costs should be capitalized.
• D)Development costs associated with successful commercial research would be amortized over the useful life of the product or process developed.

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Definitions:

Economic Profit

The total revenue minus explicit and implicit costs, representing the additional gain beyond breaking even.

Weekly

Pertaining to, happening once every week or pertaining to a week.

Market Price

The price of a good or service determined by the supply and demand conditions in a competitive marketplace, reflecting what consumers are willing to pay and sellers accept.

Short Run

A period in economics during which at least one factor of production is fixed and cannot be changed.