USGAAP Requires That Virtually All Costs Incurred for Research and Development

question 82

True/False

U.S.GAAP requires that virtually all costs incurred for research and development of an internally generated patent be capitalized.

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Definitions:

Joint Cost Allocation

The process of distributing the costs of production that are incurred in producing multiple products at the same point of the process across those products.

Joint Costs

Costs that are incurred up to a split-off point in the production process, making them inseparable costs shared by more than one product.

Sunk Costs

Costs that have already been incurred and cannot be recovered, which should not influence future business decisions since they cannot be changed.

Split-off

A point in a production process where multiple products are generated from a single input, each having its own identifiable market.