Enter the letter corresponding to the response that best completes each of the following statements or questions.

1			Which of the following is not a characteristic of the balance sheet?
			A)	The major classifications of the balance sheet are assets, liabilities, and owners' equity.
			B)	The balance sheet reports the change in financial position.
			C)	Assets generally are listed in order of their liquidity.
			D)	The balance sheet provides information useful in assessing liquidity.
2			The basis used to classify assets as current or noncurrent is:
			A)	Whether an asset is monetary or nonmonetary.
			B)	The operating cycle or one year, whichever is shorter.
			C)	Usually one year, because the operating cycle typically is less than one year.
			D)	Whether the asset is currently used in the company's operations.
3			An item not generally classified as a current asset is:
			A)	Patent.
			B)	Trade receivables.
			C)	Prepaid rent.
			D)	Inventories.
4			Included in the category of current liabilities would be:
			A)	Pension obligations.
			B)	Lease obligations.
			C)	Obligations expected to require the creation of other current liabilities.
			D)	Mortgages payable.
5			An item not generally classified as a current liability is:
			A)	Revenue received in advance.
			B)	Accrued interest payable.
			C)	Accounts payable.
			D)	Bonds payable.
6			Current assets minus current liabilities equals:
			A)	Net assets.
			B)	Working capital.
			C)	The current ratio.
			D)	Cash equivalents.
7			Operational assets refer to property, plant, and equipment, and:
			A)	Receivables.
			B)	Inventories.
			C)	Investments.
			D)	Intangibles.
8			Information not generally disclosed in the summary of significant accounting policies is:
			A)	The company's depreciation method.
			B)	The fact that the company uses the FIFO inventory method.
			C)	Arelated party transaction.
			D)	The company's revenue recognition policy.
9			The compensation of directors and top executives is disclosed in:
			A)	The proxy statement.
			B)	The annual report.
			C)	A disclosure note.
			D)	Interim financial statements.
10			Which ratio most directly indicates the extent of the company's reliance on financial leverage?
			A)	Times interest earned.
			B)	Debt to equity.
			C)	Return on shareholders' equity.
			D)	Current ratio.
11			The acid-test ratio excludes which of the following elements from the numerator?
			A)	Short-term investments.
			B)	Receivables.
			C)	Cash equivalents.
			D)	Inventories.
12			For a firm with a current ratio of 2.0, which of the following transactions would most likely cause the ratio to decrease?
			A)	The collection of cash from customers on account.
			B)	The sale of a building for cash.
			C)	The purchase of inventory on account.
			D)	The issuance of capital stock.
13			The following information pertains to questions 13 through 15: Sanchez Corporation Selected Financial Information   12/31/06 12/31/05 Cash $   20,000 $   25,000 Accounts receivable (net) 100,000 110,000 Inventories 190,000 155,000       Total current assets 310,000 290,000 Noncurrent assets 230,000 210,000 Current liabilities 200,000 190,000 Long-term liabilities 40,000 50,000 Shareholders' equity 300,000 260,000   Net income $40,000   Interest expense 10,000   Income tax expense 20,000   The acid-test ratio for 2006 is:
			A)	0.8
			B)	1.6
			C)	0.6
			D)	0.34
14			The debt to equity ratio for 2006 is:
			A)	.80
			B)	.44
			C)	.67
			D)	.13
15			The times interest earned ratio is:
			A)	4.0 times
			B)	5.0 times
			C)	6.0 times
			D)	7.0 times