When Research and Development Costs Are Incurred in the Expectation

question 21

Multiple Choice

When research and development costs are incurred in the expectation of future benefits but it is not possible,at the reporting date,to establish that it is probable that future economic benefits will eventuate,then:

• A) the costs should be recognised as an asset
• B) the costs should be recognised as expense together with estimated revenue
• C) the costs should be recognised as expense prior to recognition of revenues
• D) no action should be taken.

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Definitions:

Creationism

The belief that the universe and life originated from specific acts of divine creation, as opposed to the scientific conclusion that they came about through natural processes.

Executive Functions

Cognitive processes that regulate an individual's ability to organize thoughts and activities, prioritize tasks, manage time efficiently, and make decisions.

Inhibitory Control

The cognitive ability to suppress responses or behaviors that are inappropriate or irrelevant to achieving a goal.

Brain Activity

Refers to the electrical and chemical processes occurring within the brain that enable thought, perception, and coordination of bodily functions.