Accounting: What the Numbers Mean 9th Edition by Wayne W McManus, Daniel F Viele, David H Marshall

Exercise 45

For the following questions, circle the best respones.

Because of their importance to financial statement users, certain expenses are normally reported as separate items on the income statement (especially when significant in amount). Which of the following expenses is not normally reported as a separate item?

a. Advertising Expense.

b. Cost of Goods Sold.

c. Interest Expense.

d. Income Tax Expense.

Step 1 of 5

(a)

Advertising Expense is not normally an important expense to financial statement users, and is therefore is not reported as a separate item on the income statement. Instead, it is normally included in the Selling, General, & Administrative Expenses account.