Expenditures for research and development intended to lead to new products of commercial value:
A)Should be recorded as intangible assets and amortized during the years in which benefits are expected.
B)Should be charged to expense when incurred.
C)Should be capitalized only if patents are expected to be granted.
D)Should be classified as deferred charges.

Question

Quizplus · Accepted Answer

Expenditures for research and development are considered to be expenses and should be charged to expense when incurred. This is because it is difficult to determine the future economic benefits that will be derived from such expenditures. As such, they are not recognized as assets and cannot be capitalized.

Expenditures for Research and Development Intended to Lead to New