Which Statement Is Correct

question 9

Multiple Choice

Which statement is correct?

• A)Capitalization of costs ceases when the post development phase begins.
• B)The development phase includes generating new ideas or searching for new materials.
• C)The project must meet IAS 38 criteria before research costs can be capitalized.
• D)The post development phase includes designing, constructing or testing a prototype.

---

Definitions:

Merchandise

Goods bought and sold by a business in the ordinary course of its trading activity.

Credit

An accounting entry that increases liabilities or equity or decreases assets, or an arrangement to receive cash, goods, or services now and pay for them in the future.

Credit Sales

Transactions where goods or services are sold to a customer with an agreement to pay at a later date.

Cash Collection

The process of receiving and processing payments from customers.