In What Way(s)can R&D Costs Be Reported in an Income

question 1

Multiple Choice

In what way(s) can R&D costs be reported in an income statement organized by function?

• A) R&D expenses are reported as a separate function,item or line.
• B) R&D is not identified as such but is included in another function,such as selling,general and administrative expenses.
• C) R&D is not reported as such but since it has incurred expense,it becomes a part of the cost of goods sold.
• D) All of these are correct.

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Definitions:

Paid-In Capital

The amount of money a company has received from shareholders in exchange for stock.

Organizational Costs

Expenses related to the formation of a corporation or business entity, including legal fees, registration fees, and promotional expenses.

Intangible Asset

An asset that lacks physical substance and is not financial in nature, such as patents, trademarks, and goodwill.

Preferred Stockholders

Investors who own shares of preferred stock in a company, typically entitled to dividends before common stockholders and having priority in assets upon liquidation.