Which of the following accounting principles or conventions is contradictory to the GAAP requirement to expense R&D costs immediately?
A)historical cost principle
B)comparability
C)conservatism
D)matching principle

Question

Quizplus · Accepted Answer

The matching principle requires expenses to be recognized in the same period as the revenues they helped generate. However, since the benefits of R&D can be difficult to measure and are often realized over multiple periods, GAAP requires companies to immediately expense R&D costs instead of capitalizing them as an asset. This is contradictory to the matching principle, which would suggest capitalizing R&D costs to match them with the revenues they help generate over time.

Which of the Following Accounting Principles or Conventions Is Contradictory