1. If a firm has an accounts receivable balance of $18,800 at the end of 2007 and $16,500 at the end of 2008, which of the following statements about accounts receivable is correct?

A. Accounts receivable decreased by $2,300 and represented a use of cash.
B. Accounts receivable increased by $2,300 and represented a source of cash.
C. Accounts receivable decreased by $2,300 and represented a source of cash.
D. Accounts receivable increased by $2,300 and represented a use of cash.

2. If a firm has revenues of $15,090 and expenses of $8,850, what is the firm's taxable income?

A. $15,090            C. $6,240
B. $8,850              D. $23,940

3. Which of the following statements about the issuance of an initial public offering (IPO) is correct?

A. IPOs may be either underpriced or overpriced.
B. IPOs are never overpriced.
C. IPOs are never underpriced.
D. IPOs are always correctly priced.

4. If a firm has revenues of $15,090, operating expenses of $8,850, and a tax expense of $2,120, what is the firm's net income?

A. $8,850              C. $6,240
B. $4,120              D. $8,360

5. When you're preparing a common-sized balance sheet, which of the following measures is set to equal 100 percent?

A. Total liabilities   C. Total owners' equity
B. Total assets      D. Cash