Problem 2-2 Costs and Expenses

For each cost incurred by a retailer listed below, select the correct answer using the following key:

All = recognize all of the expenditure as an expense on the income statement in the period it occurs Part = recognize only a portion of the expenditure as an expense on the income statement in the period it occurs, with the remainder to be recognized as expense in future periods

Then determine how the cost will be treated.

Item	Amount Recognized	This cost
1. Display fixtures in a retail store	Select	Select
2. Advertising	Select	Select
3. Merchandise for sale	Select	Select
4. Incorporation (legal costs & stock issue costs)	Select	Select
5. Cost of a franchise	Select	Select
6. Office supplies	Select	Selec
7. Wages and salaries	Select	Select
8. Computer software	Select	Select
9. Computer hardware	Selec	Select