Operating losses incurred during the start-up years of a new business should be

a. accounted for and reported like the operating losses of any other business.
b. written off directly against retained earnings.
c. capitalized as a deferred charge and amortized over five years.
d. capitalized as an intangible asset and amortized over a period not to exceed 20 years.

Answer: a. accounted for and reported like the operating losses of any other business.