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Which statements about research costs is not valid

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Reference no: EM132680036

Problem a. Which of the following statements about research and development costs is not valid?

Multiple Choice

Option 1: Decreases in R&D expenditures can be used to boost current period income.

Option 2: Asset utilization ratios of R&D-intensive firms will be lower than those of non-R&D -intensive firms.

Option 3: · Asset utilization ratios of R&D-intensive firms will be higher than those of non-R&D- intensive firms.

Option 4: · As long as a firm continues to invest in R&D, total assets and total shareholders' equity will be understated.

Problem b. The allocation of the cost of a wasting asset to future periods of benefit is termed as:

Multiple Choice

Option 1: allocation.

Option 2: amortization.

Option 3: depreciation.

Option 4: depletion.

Reference no: EM132680036

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