Multiple Choice: Financial Reporting Select the correct answer for each of the following:

1. An asset is considered to be:

a. An unexpired cost.

b. An expired cost.

c. Something that will be sold for cash.

d. An anticipated future cash outflow.
2. Which of the following items should not appear in the income statement of Spartan Company?

a. Investment by owners.

b. Revenues.

c. Losses.

d. Expenses.
3. Which of the following is not an example of the matching concept?

a. Recording sales commission expense at the time of sale.

b. Recording rent expense each year during a five-year lease.

c. Recognizing income on the sale of inventory on credit at the time payment is received.

d. Recognizing cost of goods sold for the units of inventory sold during the period.
4. An accounting entity may consist of:

a. A single corporation.

b. Two or more corporations.
. A partnership.
. A sole proprietorship.
oad . Any of the above.