18 How is a firm's average income tax rate calculated? a. Income taxes divided by profits before income taxes. b. Income taxes divided by net income. c. Income taxes divided by sales. d. Income taxes divided by gross profit. Question 19 Why is the quick ratio a more accurate test of short- run solvency than the current ratio? a. The quick ratio considers only cash and marketable securities as current assets. b. The quick ratio eliminates prepaid expenxes for the numerator. c. The quik ratio eliminates inventories from the numerator. d. The quick ratio eliminates prepaid expenses for the denominator. Question 20 The gross profit margin and .... are complements of each other. a. None of the listed answers. b. Net profit. c. Operating profit. d. Cost of goods sold percentage. Question 21 Which of the following assets would be classified as current assets on the balance sheet? a. Accounts receivables, prepaid expenses, property, plant, and equipment. b. Inventory, goodwill, unearned revenue. c. Cash, accounts payable, deferred income taxes d. Cash equivalents, inventory, prepaid expenses. Question 22 Amortization is an allocation process applied to acquisition and development of natural resources, such as oil and gas, and other minerals. True False