1.The required recording of research and development expenditures has which of the following effects on the financial statements?

a.Understatement of research and development expense

b.Overstatement of research and development expense

c.Understatement of research and development assets

d.Overstatement of research and development assets

e.None of these are correct

2.Which of the following expenditures should be expensed in the year incurred?

a.Targeted advertising

b.Equipment

c.Prepaid rent

d.Research and development

3.Which of the following is the required treatment of research and development costs under international accounting rules?

a.Research and development costs are expensed as incurred

b.Research and development costs are capitalized

c.Research costs are expensed and development costs are capitalized

d.Research costs are capitalized and development costs are expensed