xpenditures for research and development intended to lead to new products of commercial value: Group of answer choices Should be capitalized only if patents are expected to be granted. Should be recorded as intangible assets and amortized during the years in which benefits are expected. None is correct. Should be charged to expense when incurred. Should be classified as deferred charges.

Should be charged to expense when incurred.

Explanation:

Under the GAAP system, Research and Development costs are considered to be period costs. This includes whether or not the company did the R&D themselves or hired another company to do it or purchased their services.

Period costs are to be expensed in the period that they are incurred which is why R&D costs are to be expensed when incurred and reflected in the Income Statement.

They are upstream inputs because they are needed for production

Explanation:

Upstream inputs are those inputs that are needed for the production of goods and services, for example: raw materials, or energy. This is in opposition to downstream inputs, which are those needed for the selling and distribution of goods and services, like a truck.

Energy, fertilizers, pesticides, and seeds are all upstream inputs because they are raw materials used to obtain agricultural goods from the soil.