R&D Costs Are Expensed in the Period That They Occur

question 107

Multiple Choice

R&D costs are expensed in the period that they occur,

• A)which is a violation of the matching principle.
• B)because FASB determined that the benefits of R&D are often harder to pinpoint than the costs.
• C)because is was the only way FASB could get verifiability.
• D)because IASB lobbied FASB to do so.
• E)because the U.S.Congress passed a law on it.

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Definitions:

Adjusted Gross Income

Adjusted Gross Income, or AGI, is an individual's total gross income minus specific deductions, used to determine taxable income on an income tax return.

Casualty Loss Deduction

A tax deduction allowed for losses from sudden, unexpected, or unusual events, such as natural disasters, fire, or theft, not compensated by insurance.

Insurance Settlement

A payment made by an insurance company to a policyholder following a claim for loss or damage covered by the policy.

Mumford

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