Beginning inventory plus the net cost of purchases is:

	a.	Cost of goods sold.
	b.	Merchandise available for sale.
	c.	Ending inventory.
	d.	Sales.
	e.	Shown on the Balance Sheet.

Alpha Bravo Charlie Company had total current assets without counting inventory of $5,888,000, total current assets of $11,700,000, and total current liabilities of $8,000,000. Its acid-test ratio (rounded to the nearest percent) equals:

	a.	0.50
	b.	0.68
	c.	0.74
	d.	1,50
	e.	2.20

Liquidity problems are likely to exist when a company's Current ratio:

	a.	Is less than the current ratio
	b.	Is 1 to 1
	c.	Is higher than 1 to 1
	d.	Is lower than 1 to 1
	e.	Is higher than the acid test ratio

The credit terms 2/10, n/30 are interpreted as:

	a.	30% discount if paid within 2 days
	b.	30% discount if paid within 10 days
	c.	10% cash discount if the amount is paid within 2 days, with the balance due in 30 days
	d.	2% cash discount if the amount is paid within 10 days, with the balance due in 30 days
	e.	2% discount if paid within 30 days

A trade discount is:

	a.	A term used by a purchaser to describe a cash discount given to customers for prompt payment.
	b.	A reduction in the selling price below the list price given to select customers.
	c.	A term used by a seller to describe a cash discount granted to customers for prompt payment.
	d.	A reduction in price for prompt payment.