Which of the Following Is the Proper Accounting Treatment for Research

question 98

Multiple Choice

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

• A) Research and development costs must be capitalized and amortized over 70 years or less.
• B) Research and development costs must be capitalized and amortized over 20 years or less.
• C) Research and development costs must be capitalized and expensed each year to the extent that their value has declined.
• D) Research and development costs must be expensed.

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Definitions:

Benchmarking

The practice of comparing business processes and performance metrics to industry bests and best practices from other companies.

Australian Company

A business entity that is registered and operates in Australia, abiding by the country's corporate laws and regulations.

Local Conditions

The specific environmental, economic, and social conditions or circumstances that exist in a particular location or community.

World Best Practice

A benchmarking term referring to the highest current performance standards or methods in an industry or area of activity globally.