26.

(4 points) Each of the following statements is justified by a concept or convention of accounting. Write the letter in the blank next to each statement corresponding to the concept involved.

a. Consistency

b. Materiality

c. Full disclosure

d. Conservatism

_____	1. Use the same accounting principles and methods from year to year within a company.
_____	2. Companies describe events that make a difference to financial statement users.
_____	3. When in doubt, choose the accounting method that will least likely overstate assets and net income.
_____	4. The constraint of determining whether an item is large enough in dollar amount to likely influence the decision of an investor or creditor.

27.

(3 points) For each of the ratios listed below, indicate by the appropriate code letter, whether it is a liquidity ratio, a profitability ratio, or a solvency ratio.

Code:

L	=	Liquidity ratio
P	=	Profitability ratio
S	=	Solvency ratio

____	1. Debt to total assets ratio
____	2. Earnings per share
____	3. Current ratio