1. Current assets are presented in the balance sheet in A) ascending order of their balances. B) descending order of their balances. C) order of their liquidity. D) reverse order of their liquidity. 2. Treasury stock should be reported as a(n) A) current asset. B) investment C) other asset. D) reduction of stockholders' equity. 3. The basis for classifying assets as current or noncurrent is the period of time normally required by the accounting entity to convert cash invested in A) B) C) D) inventory back into cash, or 12 months, whichever is shorter. receivables back into cash, or 12 months, whichever is longer. tangible fixed assets back into cash, or 12 months, whichever is longer. inventory back into cash, or 12 months, whichever is longer. 4. A generally accepted method of valuation is 1. trading securities at market value. 2. accounts receivable at net realizable value. 3. inventories at current cost. A) 1 B) 2 C) 3 D) 1 and 2 5. The stockholders' equity section is usually divided into what three parts? A) Preferred stock, common stock, treasury stock B) Preferred stock, common stock, retained earnings C) Capital stock, additional paid-in capital, retained earnings D) Capital stock, appropriated retained earnings, unappropriated retained earnings Page 1