Section I: Multiple Choice Questions (2 points each) 1.Which of the following is CORRECT? A. Retained Earnings (2015)- Retained Earnings (2014) - Net Income (2015) B.Retained Earnings (2014)-Retained Earnings (2015) + Net Income (2014) C. Retained Earnings (2015)-Retained Earnings (2014) + Net Income (2015) D. Retained Earnings (2014)-Retained Earnings (2015) + Net Income (2014) + Dividends (2015) Dividends (2014) - Dividends (2015) + Dividends (2014) 2.Which of the following is NOT FOUND in the Balance Sheet? A. Retained Earnings Inventories C.Depreciation Expense D.Notes Payable 3.A firm has a change in sales from 1,500,000 to 1,600,000 units. The resulting change in earnings before interest and tax (EBIT) is S100,000 (from $400,000 to $500,000). The firm's degree of operating leverage (DOL) is: A. 0.50 1.05 C.2.50 D. 3.75 Section II: True/False Questions (2 points each) Please circle the correct answer. True False 1 True False 2.Depreciation expense is a cash flow item and should appear in the Income The current ratio is always greater than the quick ratio