a. Explanation Accounting for development costs: Development costs are those costs which are incurred for developing a tool or technology that can be used to increase the production or increase the effectiveness of the production process. Such costs are determined to be either expense out or capitalized based on the duration of the developing a process. A brief memorandum for the appropriate method of accounting for the development costs: Memo From ABC To XYZ Re: Issues of the method of accounting for software development cost. Dear XYZ, Under FASB ASC 985, research and development costs include the costs incurred to develop technological advancements of computer software to be leased, marketed otherwise, or sold shall be considered as research and development costs... b. To determine Describe the major audit issue while auditing the software development costs.

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Author: Ray Whittington, Kurt Pany

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Question

Chapter 6C, Problem 3P

To determine

Research and write a brief memorandum for the working paper summarizing the appropriate method of accounting for the development costs.

To determine

Describe the major audit issue while auditing the software development costs.

Expert Solution & Answer

Chapter 6C Solutions

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Ch. 6C - Prob. 1P Ch. 6C - Prob. 2P Ch. 6C - Prob. 3P Ch. 6C - The working paper for Keystone Computers &...

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