Which of the Following Costs Should Be Capitalized in the Year

question 137

Multiple Choice

Which of the following costs should be capitalized in the year incurred?

• A)costs to successfully defend a patent
• B)research and development costs for a new product to be introduced later this year
• C)cost to internally generate goodwill
• D)organizational costs

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Definitions:

Abandoned Contract

A contract that is no longer active because all parties have ceased to perform their obligations.

Quantum Meruit

A Latin term meaning "as much as he has earned," used in legal context to denote compensation deserved for services or work done when no contract exists.

Substantial Performance

A legal concept that a contract has been completed enough to fulfill its purpose, even if all details have not been precisely met.

Anticipatory Breach

A situation in contract law where one party indicates in advance that they will not fulfill their contractual obligations.