The costs of research and development performed by the company for sale to others (but not yet sold) would be included in which of the following accounts?
A) Research and development expense.
B) Sales revenue.
C) Inventory.
D) Cost of goods sold.

Question

Quizplus · Accepted Answer

The costs of research and development performed by a company for sale to others, but not yet sold, are considered as part of the inventory. This is because these costs are capitalized as an asset (inventory) until the product is sold, at which point the costs are then recognized as an expense (cost of goods sold).

The Costs of Research and Development Performed by the Company