I n t e r a c t I v e t e X t foundations in Accountancy/ acca financial accounting (ffa/FA) bpp learning Media is an acca approved Content Provider

What should be the depreciation charge for the year ended 31 December 20X1? 

A $68,000 

B $57,000 

C $53,000 

D $21,000 

 

(2 marks) 

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PRACTICE QUESTION BANK 

 

493 

40 

Which of the following statements about research and development expenditure are correct? 

1 

Research expenditure, other than capital expenditure on research facilities, should be 

recognised as an expense as incurred. 

2 

In deciding whether development expenditure qualifies to be recognised as an asset, one 

of the factors it is necessary to consider is whether there will be adequate finance 

available to complete the project. 

3 

Development expenditure recognised as an asset must be amortised over a period not 

exceeding five years. 

A 

1, 2 and 3 

B 

1 and 2 only 

C 

1 and 3 only 

D 

2 and 3 only   

 

(2 marks) 

41 

Bluebottle Co has incurred development expenditure of $500,000 and research expenditure of 

$400,000 in the year ended 31 December 20X1. The development expenditure has been 

capitalised in accordance with IAS 38. Bluebottle Co's policy is to amortise capitalised 

development expenditure over 25 years.  

What balances relating to research and development would appear in the financial statements