Research and development costs are expensed on the income statement as opposed to being capitalized on the balance sheet.

Question

Quizplus · Accepted Answer

Research and development costs are typically expensed on the income statement as they are considered to be a period cost and do not have long-term value. This is in contrast to capital expenditures, which are capitalized on the balance sheet and depreciated over time as they have a long-term impact on the company's operations.

Research and Development Costs Are Expensed on the Income Statement