Question

38. Research and development costs are

A) treated as an expense when incurred.

B) capitalized but not amortized.

C) capitalized and amortized over the periods that will probably benefit from the research and development.

D) included with the cost of the patent resulting from the research and development.

39. All of the following are intangible assets except

A) Patents

B) Goodwill

C) Franchises

D) Accounts Receivable

40. Which of the following below is an example of a capital expenditure?

A) Cleaning the carpet in the front room

B) Tune-up for a company truck

C) Replacing an engine in a company car

D) Replacing all burned-out lights bulbs in the factory

Answer 1

38. Option C

Research and development costs are capitalized and amortized over the periods that will probably benefit from the research and development.

39. Option D

All of the following are intangible assets except Accounts Recievable. Beacause accounts recievable is a current asset but not intangible assets.

40. Option C

Replacing an engine in a company car is an example of a capital expenditure because it gives the extra useful life to the car and also the engine is a main capital part of the asset.

Thanks.....