Jones Company purchases a new coffee pot for the employee lunchroom

 Jones Company purchases a new coffee pot for the employee lunchroom. It is expected that the coffee pot will be used by the company for at least five years. Jones Company decides that because the cost of the coffee pot is small, the purchase will be recorded as an expense, rather than as a depreciable asset. Jones Company is following the convention of a. full disclosure c. materiality b. conservatism d. consistency 2. Hamlin Co. is the defendant in a lawsuit that will almost certainly be resolved in the favor of the plaintiff. The estimated debt to Hamlin resulting from the suit is $1,000,000. Hamlin does not mention the suit in its' annual report to stockholders. Hamlin has violated the principle of: a. conservatism C. consistency b. materiality d. full disclosure 3. Patents and copyrights are examples of: a. current assets c. property, plant, and equipment b. investments d. intangible assets 4. Whether to classify stock held in another company as a 'current asset' or an investment' depends on the length of time the management of the company plans to hold stock. a. true b. false 5. The account dividend revenue' would be included in which section of the income statement? a. net sales c operating expenses b. cost of goods sold d. other revenues and expenses 6. The account sales returns and allowances' would be included in which section of the income statement? a. net sales c. operating expenses b. cost of goods sold d. other income and expenses