13. In accounting for research and development costs. A) the general rule under both US GAAP and IFRS is that research and development B) both US GAAP and IFRS expense research costs as incurred but capitalize C) US GAAP generally expenses all research and development costs while IFRS D) IFRS generally expenses all research and development costs while US GAAP costs should be expensed as incurred development costs once technological and economic feasibility has beern demonstrated. expenses research costs as incurred but capitalizes development costs once technological and economic feasibility has been demonstrated. expenses research costs as incurred but capitalizes development costs once technological and economic feasibility has been demonstrated. 14. One difference between IFRS and GAAP in valuing inventories is that A) IFRS, but not GAAP, allows reversals so that inventories written down under B) GAAP defines market value as replacement cost where IFRS defines market as the C) IFRS, but not GAAP, requires that inventories be valued at the lower of cost or D) GAAP strictly adheres to the historical cost concept and does not allow for write- lower-of-cost-or-market can be written back up to the original cost selling price. market. downs of inventory values while IFRS embraces fair value. 15. During 2011, a U.S. company purchased inventory from a foreign supplier. The transaction was denominated in the local currency of the seller. The direct exchange rate increased from the date of the transaction to the balance sheet date. The exchange rate decreased from the balance sheet date to the settlement date in 2012. For the years 2011 and 2012, transaction gains or losses should be recognized as: a. b. c. d. 2011 gain gain loss loss 2012 gain oss loss gain 16. The forward exchange rate quoted for the remaining term of a forward contract is used to account for the contract when the forward contract: A) is a hedge of an identifiable foreign currency commitment. B) is a hedge of an exposed net liability position. C) was acquired to speculate in foreign currency D) extends beyond one year or the current operating cycloe