Development Costs Related to Computer Software That Is to Be

question 112

Multiple Choice

Development costs related to computer software that is to be sold, leased, or otherwise marketed should be accounted for in which of the following ways?

• A) All software development costs should be recorded as R&D expense.
• B) All software development costs should be capitalized.
• C) All software development costs should be recorded as R&D expense until technological feasibility is established.
• D) All software development costs should be recorded in R&D expense until the product is available for general release to customers.

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Definitions:

Price Level

The mean of current prices for all goods and services generated within the economy.

Keynesian Theory

An economic theory proposing that active government intervention in the marketplace and monetary policy is the best method of ensuring economic growth and stability.

Equilibrium Interest Rate

The interest rate at which the demand for funds equals the supply of funds in the financial market, bringing the market into balance.

Saving and Investment

Economic activities that involve setting aside money for future use and allocating resources into investments to generate returns.