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Deficits accumulated during the development stage of a company should be:
Suggested Answer: B
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Choice 'b' is correct. Deficits accumulated during the development stage of a company should be reported as a part of stockholders' equity.
Rule: Development stage enterprises should present FS in accordance with GAAP and make additional disclosures such as: cumulative net losses, cumulative deficit (as part of equity), cumulative sales & expenses (part of I/S), cumulative statement of cash flows and supplementary 'shareholders equity.'
Choices 'a', 'c', and 'd' are incorrect, per the rule above.
8 comments · newest first
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Ruthann
11 months ago
What if the company never turns a profit? Would D still apply?
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Gianna
12 months ago
I agree with D, amortizing seems fair for development costs.
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Felton
12 months ago
Surprised that people would consider capitalizing these costs at all!
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Roxanne
12 months ago
Definitely not A, that just sounds wrong.
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Louisa
1 year ago
I think option D makes the most sense for long-term planning.
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Jesusita
1 year ago
Okay, let me see... Facial recognition seems like the most logical choice here since it scans external features through a camera. I'll go with that.
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Salina
1 year ago
Hmm, I'm not totally sure about this one. I'll need to think it through carefully and review the material on defined contribution plans.
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Kenny
1 year ago
Hmm, I'm a bit confused here. The question mentions a spear-phishing email and a malicious link, so I'm wondering if a web security solution might also be needed to block those initial attack vectors. I'll have to think this through carefully.