Suppose a company spends $100,000 on research and development in 2021. As a result of the products developed, additional revenue is generated over the next five years totaling $600,000. When is the cost of the research and development in 2021 recognized as an expense?

Suppose a company spends $100,000 on research and development in 2021. As a result of the products developed, additional revenue is generated over the next five years totaling $600,000. When is the cost of the research and development in 2021 recognized as an expense?



A) Evenly over the period 2022-2026.

B) Full amount in 2026.

C) Evenly over the period 2021-2025.

D) Full amount in 2021.


Answer: D


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