Reference no: EM132965512

Problem 1: How should research and development costs be accounted for?

a. Must be capitalized when incurred and then amortized over their estimated useful lives.

b. Must be expensed in the period incurred.

c. May be either capitalized or expensed when incurred, depending upon the materiality of the amounts involved.

d. Must be expensed in the period incurred unless it can be clearly demonstrated that the management has the intention to capitalized the costs.

Problem 2: Which of the following costs should be capitalized in the year incurred?

a. Research and development costs.

b. Costs to internally generate goodwill.

c. Organizational costs.

d. Costs to successfully defend a patent.

e. All of them should be expensed when incurred.