Based on GAAP, most software development costs are likely to be
A) expensed as R&D costs.
B) allocated to inventory and expensed to cost of goods sold when the software is sold.
C) capitalized and amortized over a 40-year period.
D) capitalized and amortized over a relatively short period, such as five years.

Question

Quizplus · Accepted Answer

Under GAAP, most software development costs are expensed as research and development (R&D) costs when incurred until technological feasibility has been established, after which any additional costs may be capitalized and amortized.

Based on GAAP, Most Software Development Costs Are Likely to Be