Which of the Following Is the Proper Accounting Treatment for Research

question 15

Multiple Choice

Which of the following is the proper accounting treatment for research and development costs?

• A)Research and development costs must be capitalised and amortised over 20 years or less.
• B)Research and development costs must be capitalised and amortised over 70 years or less.
• C)Research and development costs must be capitalised and expensed each year to the extent that their value has declined.
• D)Research costs must be expensed and development costs may be capitalised in limited circumstances.

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Definitions:

Fraudulent Actions

Acts intentionally carried out to deceive others, usually for personal or financial gain, which are illegal.

Start-Up Funds

Capital or financial resources allocated or required to start a new business or venture.

Creditors

Entities or individuals to whom money is owed by debtors.

Liable

A condition of being responsible for a specific legal obligation or duty.