Homework 3: chapters 4 Receivables and chapter 5 Inventory 1. Claims for which formal instruments of credit are issued as proof of the debt are a. accounts receivable. b. interest receivable. c. notes receivable. d. other receivables. 2- To be classified as a current asset, an investment must meet the following criteria: A- The investment must be liquid (easily convertible to cash); and B- The investor must intend to either convert the investment to cash within one year C- can be use it to pay a current liability. D- All of them 3- Companies invest in debt or equity securities of other companies for many reasons such as: A-Having excess cash that is not immediately needed. B- A company may invest the cash in hopes of earning additionally income from investments. C- Long-term strategic reasons such as obtaining the ability to influence another company. D- All of them 4- There are several strategies for increasing the current ratio. A-Launch a major sales effort to increase cash and receivables to improve the current ratio. B-Pay off some current liabilities before year end. C-Reclassifying investments as current assets. D- All of them 5- A gross profit percentage of 38% means each $1 of sales generates A- $0.38 of gross profit. B- $38 of gross profit. C- $3.8 of gross profit.