Under U.S. GAAP, the cost of research and development performed for others is capitalized and recorded as:

• A. Deferred revenue
• B. A receivable
• C. Research and development expense
• D. An intangible asset

Answer: (B)

Verified step by step guidance

1. Understand the context of the question: Under U.S. GAAP, research and development (R&D) costs are treated differently depending on whether the R&D is performed for the entity itself or for others. This question specifically addresses R&D performed for others.
2. Clarify the accounting treatment for R&D performed for others: When an entity performs R&D for others, the costs incurred are not expensed immediately. Instead, they are recorded as a receivable because the entity expects reimbursement from the party for whom the R&D is performed.
3. Review the definition of a receivable: A receivable is an asset that represents an amount owed to the entity by another party. In this case, the receivable arises because the entity has performed R&D services and expects payment for those services.
4. Eliminate incorrect options: Deferred revenue refers to payments received in advance for services not yet performed, which does not apply here. Research and development expense applies to R&D performed for the entity itself, not for others. An intangible asset refers to non-physical assets like patents or trademarks, which is unrelated to this scenario.
5. Conclude the correct accounting treatment: Based on U.S. GAAP, the cost of R&D performed for others is capitalized and recorded as a receivable, reflecting the expectation of reimbursement from the party for whom the R&D was conducted.