The Proper Accounting for the Costs Incurred in Creating Computer

question 7

Multiple Choice

The proper accounting for the costs incurred in creating computer software products that are to be sold, leased, or otherwise marketed to external parties, is to

• A) capitalize all costs until the software is sold to external parties.
• B) charge research and development expense when incurred until technological feasibility has been established for the product.
• C) charge research and development expense only if the computer software has alternative future uses.
• D) capitalize all costs as incurred until a detailed program design or working model is created.

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Definitions:

Bait-and-Switch Advertising

A deceptive marketing practice where customers are lured with an attractive offer that is unavailable, with the intent of selling a different, usually more expensive item.

Reasonably Adequate Quantities

Amounts of goods or resources considered sufficient to meet a standard of reasonableness and adequacy.

Advertised Item

An item that is publicly promoted or marketed through various forms of media.

Lanham Act

A United States federal statute that governs trademarks, service marks, and unfair competition, providing protection against brand and trademark infringement.