Which of the Following Costs Would Not Be Capitalized

question 64

Multiple Choice

Which of the following costs would not be capitalized?

• A) Acquisition cost of equipment to be used on current and future research projects.
• B) Engineering costs incurred to advance the project to the full production stage.
• C) Cost incurred to file for patent.
• D) Cost of testing prototype before economic feasibility has been demonstration.

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Definitions:

Net Income

The total profit of a company after all expenses and taxes have been deducted from revenue.

Operating Activities

Business activities directly related to the production and delivery of goods and services, reflecting the company's core operations.

Current Assets

Assets that are expected to be converted into cash, sold, or consumed within one year or within the normal operating cycle of the business.

Publicly Traded

A company is described as publicly traded when its shares are bought and sold on public stock exchanges.