2008 CFA Level 1 － Sample 样题(3)－Q43 applies, otherwise, principles, accounting, face

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43、Assume U.S. GAAP (generally accepted accounting principles) applies unless otherwise noted.

Two companies are identical except for their accounting treatment of research and development costs. One company expenses all such costs immediately, while the other company capitalizes a portion of the costs. Compared to the company that capitalizes costs, the company that expenses immediately will most likely:

A. earn a lower return on assets.

B. have lower financial leverage.

C. exhibit a smoother pattern of net income over time.

D. report lower cash flow from operations in the statement of cash flows.

 

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答案和详解如下：

43、Correct answer is D

"Analysis of Long-Lived Assets: Part I - The Capitalization Decision," Gerald I. White, Ashwinpaul C. Sondhi, and Dov Fried

2008 Modular Level I, Vol. 3, pp. 347, 351, 355-356

Study Session 9-36-a, b

demonstrate the effects of capitalizing versus expensing on net income, shareholders' equity, cash flow from operations, and financial ratios;

determine which intangible assets, including software development costs and research and development costs, should be capitalized, according to U.S. GAAP and international accounting standards

Companies that capitalize research and development costs report those expenditures in the investing activities section of the statement of cash flows; companies that expense research and development costs report those expenditures in cash flow from operations.

 

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