6. Research and development costs for projects other than software development should be: A. Expensed in the period incurred. B. Expensed in the period they are determined to be unsuccessful. ing determination of success. D. Expensed if unsuccessful, capitalized if successful. 7. A contingent loss should be reported in a footnote to the financial statements rather than being accrued if: A. The likelihood of a loss is remote. B. The incurrence of a loss is reasonably possible. C. The incurrence of a loss is more likely than not. D. The likelihood of a loss is probable. 8. Funzy Cereal includes one coupon in each package of Wheatos that it sells and offers a toy car in exchange for $1.00 and 3 coupons. The cars cost Funzy $1.60 each. Experience indicates that 40% of the coupons eventually will be redeemed. During the last month of 2011 , the first month of the offer, Funzy sold 12 million boxes of Wheatos and 2.4 million of the coupons were redeemed. What amount should Funzy report as a promotional expense for coupons on its December 31, 2011, income statement? A. $O. B. $400,000. C. $800,000. D. S960,000. 9. At the beginning of 2011, Angel Corporation began offering a 2-year warranty on its products The warranty program was expected to cost Angel 4% of net sales. Net sales made under warranty in 2011 were $180 million. Fifteen percent of the units sold were returned in 2011 and repaired or replaced at a cost of $5.3 million. The amount of warranty liability on Angel's December 31, 2011 balance sheet statement is: A. $5.3 million. B. $7.2 million. C. $10.6 million. D. $1.9 million. 10. The rate of interest that actually is incurred on a bond payable is called the: A. Face rate. B. Contract rate. C. Effective rate. D. Stated rate