Refer to the Summary of Significant Accounting Policies in the notes to the financial statements in CVS Corporation’s annual report in the Supplement to Chapter 1 to answer these questions:

1. How does the concept of recognition apply to advertising costs?

2. How does the concept of valuation apply to inventories?

3. How does the concept of classification apply to cash and cash equivalents?

Comparison Analysis: CVS Versus Southwest Cash Return on Assets