37. Which of the following R&D; expenditures would be capitalized rather than ex

Question

37. Which of the following R&D; expenditures would be capitalized rather than expensed? A. The purchase price of equipment that has no alternative future use beyond the current R&D; project. B. The cost of materials consumed in the R&D; process. C. The salaries of personnel engaged in R&D; activities. D. R&D; performed under contract for other companies E. None of the above. 38. The two methods for accounting for purchase discounts are: A. The gross versus the net method. B. The direct versus the indirect method. C. The income statement versus the balance sheet method. D. The quick versus the long method. E. None of the above 39.Yummy Foods purchased a two-year fire and extended coverage insurance policy on August 1, 2018, and charged the $4,200 premium to Insurance expense. At its December 31, 2018, year- end, Yummy Foods would record which of the following adjusting entries? A) B) 87 Insurance expense C) 87 4,200 D) d insurance Insurance expense

Explanation / Answer

37) C) The salaries of personnel engaged in R&D activities

38) a) The gross versus the net method.

There Are Two Methods For Recording Purchase Discounts:

1. Gross Method - Discounts Are Not Recorded Unless They Are Taken

2. Net Method - Accounts Payable Are Recorded Net Of Discounts ,

39) D) Dr Prepaid Insurance $3,325

Cr Insurance Expense $3,325

Unused : $4,200 x 19/24 = $3,325

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