For each Multiple Choice question, prepare a 2-3 sentence description, that explains why the answer is correct (or alternatively why the others are wrong).

How would a purchase $200 of inventory on credit affect the income statement? A) It would increase liabilities by $200. B) It would decrease liabilities by $200. C) It would increase noncash assets by $200. D) Both A and C E) Purchases of Inventory on credit do not affect the income statement. The 2010 balance sheet of E.I. du Pont de Nemours and Company shows average DuPont shareholders' equity of $8,247 million, net operating profit after tax of $3,435 million, net income attributable to DuPont of $3,031 million, and common shares issued of 1,004 million. Assume the company has no preferred shares issued. DuPont's return on equity (ROE) for the year is: A) 41.7% B) 36.8% C) 30.4% D) 88.2% E) There is not enough information to calculate the ratio. The current ratio is a measure of: A) Solvency B) Bankruptcy position C) Short-term debt paying ability D) Leverage E) Current nature of Operating Expenses At what amount will accounts receivable be reported on the balance sheet if the gross receivable balance is $20,000 and the allowance for uncollectible accounts is estimated at 15% of gross receivables? A) $17.000 B) $23,000 C) $20,000 D) $3,000 E) $35,000