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 expenditure will have alternative future uses or unless contractually reimbursable.
55. Which of the following would be considered research and development?
a. Routine efforts to refine an existing product. b. Periodic alterations to existing production lines. c. Marketing research to promote a new product. d. Construction of prototypes.
56. 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. 57. Research and development costs a. are intangible assets. b. may result in the development of a patent. c. are easily identified with specific projects.