All of the Following Statements Are True Regarding Accounting for Software

question 9

Multiple Choice

All of the following statements are true regarding accounting for software development costs except:

• A) Firms must expense as incurred all costs incurred internally in developing computer software until such development achieves the technological feasibility of a product.
• B) Firms must capitalize as incurred all costs incurred internally in developing computer software.
• C) Researchers have found a significant association between costs and future earnings, which support capitalizing and amortizing product development costs permitted by U.S.GAAP and IFRS.
• D) The interpretation of the meaning of technological feasibility has created diversity in the practice of accounting for software development costs.

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Definitions:

Environmentally Determined

Refers to traits, behaviors, or outcomes shaped by the surrounding environmental factors rather than genetic influences.

Phenylketonuria (PKU)

A genetic disorder that increases the levels of a substance called phenylalanine in the blood, leading to intellectual disability and other health issues if untreated.

Gene-Environment Interactions

The complex interplay between an individual's genetic makeup and their environmental exposures, influencing various outcomes.

Phenylketonuria (PKU)

A genetic disorder characterized by a defect in the enzyme responsible for breaking down phenylalanine, leading to harmful levels of phenylalanine in the body if not treated.