Generally Accepted Accounting Principles (GAAP): These are the generally followed rules, concepts and principles used for the presentation of financial information of a business organization. Research and Development Cost: Research and development cost refers to that cost which is incurred by an organization in the process of developing a new product. To Explain: The reason for research and development costs to be recorded as expense as per GAAP.

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Chapter 10, Problem 19Q

To determine

Generally Accepted Accounting Principles (GAAP): These are the generally followed rules, concepts and principles used for the presentation of financial information of a business organization.

Research and Development Cost: Research and development cost refers to that cost which is incurred by an organization in the process of developing a new product.

To Explain: The reason for research and development costs to be recorded as expense as per GAAP.

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