Question

Suppose Apple spent $200,000 on a launching event to introduce a new product. Do you think Apple should report this $200,000 expense?

a) Yes, as it is a promotional expense directly related to a product launch.

b) No, launching event expenses are not relevant for financial reporting.

c) Reporting is optional for companies like Apple.

d) It depends on the success of the product introduced.

Answer 1

Apple should report the $200,000 expense as it is a promotional expense directly related to a product launch.

Step-by-step explanation:

The correct answer is a) Yes, as it is a promotional expense directly related to a product launch. Apple should report this $200,000 expense because it is a promotional expense that is directly linked to the launch of a new product.

Promotional expenses are deemed relevant for financial reporting as they are incurred to generate sales and increase brand awareness.

Therefore, the cost of the launching event should be recorded as an expense on Apple's financial statements.