1. A formal statement of the results of the operation of a business during an accounting period is called a(n) (A) income statement; (B) balance sheet; (C) statement of condition; (D) statement of equities; (E) trial balance. ____ _____

2. Net sales Cost of merchandise sold = (A) Operating income; (B) Operating expenses; (C) Other expenses; (D) Gross profit; (E) Cost of goods sold. ____ _____

3. The heading on a balance sheet includes the following information in what order? (A) business name, statement date, statement name; (B) statement name, period of time the statement covers, business name; (C) business name, statement name, statement date (D) business name, statement name, period of time the statement covers; (E) none of these. ____ _____

4. The ability of a business to meet its current obligations may be determined by the (A) current ratio; (B) return on equity; (C) inventory turnover; (D) average inventory; (E) average accounts receivable.